Tips for Newbies

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  • #392
    lrmatthews18
    Participant

    There was a GREAT post by NeedsHelp on the old forum but unfortunately it is not on the new forum. I wrote this post over on the FICO- Official NACA Mortgage thread but just wanted to post it over here as well. Hopefully it will help someone…

    I started the NACA process back in Aug 2011. I had a baby in September 2011, so I had to stop the process for a short while, but got back on the ban wagon in November. I think I have had every pit fall or LOX to write known to man, but it is all worth it in the end. Below are some tips that I learned along the way… I just signed my bank app today and locked in my rate and it feels great! I know it will feel better when I close.

    1. THIS IS REALLY IMPORTANT IN MY OPINION- IF AT ALL POSSIBLE TRY TO GET A RECOMMENDATION BEFORE YOU MAKE YOUR INTAKE APPOINTMENT WITH A COUNSELOR. If you know someone who went through the process ask who their counselor was or at the purchase workshop ask the volunteers who their mortgage counselor is and if they would work with them again if they had to do the process all over again. Your mortgage counselor (MC) can make a huge difference on your NACA experience. Your MC is your lifeline.

    2. If you are not an organized person GET organized, fast! My suggestion and what worked for me was a large 3 ring binder with tabs. I had each section labeled as below and organized by date:

    – Check Stubs

    – Cancelled Rent Checks

    – Bank Statements

    – Extra Info (Car note statement, credit card statements…ect)

    – Letters of Explanations (LOX)

    – NACA Documents (MRF sheet, Budget, qualifying letter)

    3. You MC will ask for things you already sent them. If you are organized you can send it again within 5 minutes and problem solved. Don’t argue with the MC, just send it.

    4. Try to be one step ahead of your MC/ underwriter (UW). For example, if you have multiple addresses on your credit report because you moved, have a short LOX to explain why you lived at that address and for how long.

    5. Your MC gets a lot of e-mails and phone calls a day, more than likely, they will get back to you within 48 hours, unless you have a MC that is on top of things and will get back to you the same day. You have to remember that most of these MCs are overworked. If you don’t get a response in 48 hours simply send a follow up e-mail.

    6. Fully Understand how Payment Shock is calculated! This caused me to not be qualified for a couple of months because I was just moving money from my checking and putting it in my savings. Calculating your PS is more than moving money. Not only does your savings accounts need to increase each month but ALL of your accounts must increase or stay the same each month. (send me an e-mail if you need more help understanding)

    7. Know that if you pay more money on your credit card than the minimum payment you can use that towards payment shock. My MC did not tell me this and a friend told me. It came in handy as it helped me get NACA Qualified.

    8. Bank Statements- Make sure when you submit your bank statements that they have your full name, address and account number. Also, send all of the pages or it will not be accepted. So if you leave off the last page and your statement says page 8 of 9 and page 9 is missing even if nothing is on it, it will not be accepted. Also, if you ever go to the bank and get them to print things for you make sure the bank stamps each page with their official stamp.

    9. If you haven’t had your intake meeting or your intake meeting is a couple of months away, start saving your payment shock now. A big hold up for people is payment shock.

    Letters of Explanations that I wrote:

    1. Why rent check changes each month- My rent check includes both rent and utilities and my utilities change every month, so the UW needed an LOX for that.

    2. Addresses on my credit report- I had to explain all of the addresses on my credit report and how long I lived at the addresses.

    3. Gift Letter Explanation- I had to explain that my mom was giving me a gift in addition to having her and her bank fill out the gift letter form.

    4. One of my checking accounts didn’t have activity on it in a couple of months and I had to go to the bank and get them to write a letter stating that there was no activity on the account.

    There were a couple of more LOXs I had to write, but I can’t remember them right now.

    The UWs are extremely picky so definitely be ready and patient.

    Home Buying Tips:

    – Work with a realtor that is willing to or has been to the NACA realtor’s workshop. I did not do this and it made my life a lot harder.

    – Know that HOA fees are calculated in your qualifying amount. I did not know this and it was a huge headache for me since my HOA fees are kind of high.

    – Know that the new construction process is different than the existing home process. I am buying a new construction home and it is not built yet, but I still was able to lock my rate in. It’s not different by a lot, but there are a couple of things that are different.

    I would say the biggest thing I learned was to not enter into a contract before being NACA Qualified. I did because they were selling out of the town home I wanted. Everything did end up working out in the end, but I put more stress on myself than I had to if I would have just waited. NACA tells you not to enter into a contract without their approval and that is because they are very slow, but where else can you get a rate of 3.5% with no closing cost, down payment and the option to buy down your rate?

    I am now in the bank app phase so I will see what the CITI UWs throw my way seeing how I no longer have to deal with the NACA UWs.

    Lenders Conditions:
    1. A copy of the Hazard Insurance Policy or Certificate of Insurance along with a 12 month paid receipt evidencing coverage amount, premium, and deductible. Effective dates of coverage must be no later than the date of closing.
    2. All credit inquiries within the last 120 days must be validated to determine if additional credit has been obtained.
    3. The credit bureau indicates that the following business is being reported at the borrowers primary residence. Please provide an acceptable explanation. FRAUD SHIELD INQUIRY ADDRESS – CKPT: RETAIL TRADE BUSINESS ON FACS+ FILE UPTOWN MARKET INC/ PARK CENTER DR/INQUIRY ADDRESS IDENTIFIED AS NON-RESIDENTIAL LOE regarding business @ home address
    (I don’t know where they got this condition from but I addressed it.)
    4. Sales contract states deposit of $$$$, provide evidence these funds have cleared donor’s account including a copy of the bank statement. All required docs for EMD .
    5. Provide fully completed PUD Project Questionnaire.

    There are a couple others, but you get the point. There will always be conditions.

    Patience and organization are key in this process.

    And remember to be proactive instead of reactive. It will make your life a lot easier.

    Even if your MC makes you mad, make sure to treat them with respect and keep your cool. Would you want to help someone who just cursed you out over the phone, NO. Yes, some are better than others, but they are human too and just want respect. Remember they have something you want, not the other way around.

    Hopes this Helps! If you have any questions just let me know.

    #418
    lrmatthews18
    Participant

    I meant to say FaithsAction not NeedsHelp. Sorry about that.

    #429
    adamnbrit
    Participant

    Thanks for this post. Very informative!

    I had a couple of questions. First regarding payment shock. Even ought my first intake appointment isn’t until September, I’ve been putting part of my paycheck into my savings account to show payment shock savings. Would this be acceptable for them?

    Another question regards cancelled rent checks. My bank no longer sends me the physical cancelled checks. I have been making photocopies of the deposited checks from their web site. Do you think this would work?

    Thanks!

    #448
    TTrumble
    Member

    Hello adamnbrit,

    The ability to show a savings pattern even before beginning the NACA process will definitely be helpful and will certainly be an excellent jump start toward having your MRF (Minimum Required Funds) ready to go to help cover the costs of inspections, the first year’s homeowner’s insurance, etc. Any present savings beyond the MRF can be applied toward buying down the interest rate.

    The payment shock amount must be determined by your MC as part of the process, and your current savings will most likely not count. You will have to show a savings pattern once the Payment Shock amount is determined. Since you already have a savings pattern established, you may only have to show a minimum of 3 months Payment Shock Savings to become qualified.

    Many banks have ceased sending the physical checks back to their customers with the monthly statement. The printouts from the website should suffice as long as they show both the front and the back of the cancelled check.

    I wish you the best in your journey to home ownership!

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #450
    TTrumble
    Member

    Hello lrmatthews18,

    Thanks for re-posting FaithAction’s advice. As I noted on another thread, we were unable to save the posts from the old forum, so I’m glad you had this on hand to share her on the new forum. I’m hoping someone out there has the thread from the Home Save category on the effects of the extreme stress and anxiety people experience when trying to save their home from foreclosure. I also see that there have already been some other good threads established sharing information between members.

    It’s good to see all the familiar names that are popping up here in the first few days of the new Forum!

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #454
    lrmatthews18
    Participant

    @adamnbrit

    For cancelled rent checks all I did was every month after the check cleared my account I printed off a copy of the check. I didn’t even know banks sent cancelled checks.

    In regards to payment shock, know how much you want your mortgage to be and how much you pay in rent now and save the difference plus $100 – $200 a month over that, just to be safe if you can. That way if something comes up that month and you have to spend $150 you still have saved your payment shock. Since your first meeting isn’t until September you have a chance to be ahead of what holds most people up, payment shock and MRF (minimum required funds). MRF if you don’t know is the money that has to be in your savings account in addition to your payment shock before NACA will qualify you. MRF consist of the money you will need to:
    – pay for the home inspection and re-inspection
    – 1 year home insurance
    – escrowed home insurance
    – 3 months real estate taxes
    – pre-paid mortgage interest
    – earnest money deposit to put your home under contract
    – and if your PS is greater than $300 you have to have 2 months of your mortgage

    Depending on your situation MRF and PS can range from $5,000 to $9,000. THIS IS JUST A GUESS!!!! IT REALLY DEPENDS ON YOUR PERSONAL SITUATION. I’m just trying to let you know that you need to have this money in savings before they will qualify you.

    There are a couple of ways you can show that you are saving PS. I know some people use their 401k. I didn’t do that.
    The simple way to think about it is that all of your accounts have to increase each month. So if you are taking money from your checking and putting it in your savings that is all well and good, but each month that checking account cannot have less money than it did the previous month. This is true for all of your savings and checking accounts. If your checking account has less money in it than it did the previous month then that will take away from the money you put towards PS.

    The best thing to do is:
    1. Know when your statements end each month, because NACA uses your ending and beginning balances on your statements to determine if you saved enough
    2. If you are getting your pay checks direct deposited know what days that money hits your account in relation to what day your statement ends because that can really mess you up!!!!
    3. Make a spread sheet so you are on top of things.
    4. If you have a bunch of checking accounts and saving accounts that you use on a daily basis, consolidate them to make your life a lot easier. Each month you have to send in statements for all of your checking and savings accounts. So if you just have one savings account and one or 2 checking accounts your life will be a lot easier.

    If that explanation doesn’t make sense let me know. Because that got me caught up at first because I was just transferring money from my checking to my savings and thought I was saving PS, but my checking account kept fluctuating each month and it was messing me up until I finally understood the system.

    #494
    Pearlnecklace77
    Participant

    I currently rent with my In-laws in a duplex and we don’t have anything in writing stating how much our rent is and when it is due. I also have been paying my rent in cash as they take forever to cash it.

    Do I need to have something in writing, and since they take forever to cash checks, if I have the bank mail them a check so it leaves my account ASAP would that work?

    #495
    TTrumble
    Member

    Hello Pearlnecklace77,

    You are definitely going to have to create a paper trail proving the rent payments, especially since you are renting from relatives. Start providing them with a rent check regularly every month. Having the bank mail them a check each month is probably a good idea with what you describe.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #753
    augredbone
    Participant

    wow so u will possibly need to save 5-9000.00 in order to be considered to the next step of getting approved???? i know thats just a rough estimate but depending on what you make outside of your reg bills that can take forever to save just say you are only able to stash away a extra 100 a mnth thats only 1200 a year and that can take you years to do… me personally im trying to get a payment where im at currently where im at now with rent or lower… i go to attend a workshop this weekend but ive beend doing research to see if the program is worth my time… i dont see too many success stories more bad than good… im still positive about the program im trying to see if its worth my time to attend the seminar etc…. i have some money put away currently and plan on moving from my townhome once my lease up to save money.. reading these big numbers scare me because i know the program is to help people who have a hard time getting a hm through the banks but lets face it some but not all have a lot of money stashed away or have a lot they can put towards savings each month to equal big number…. can someone tell me how the payment shock works if you are not trying to go over your current rent if you are trying to go under or stay where u are at currently…. and the hm im lookin at is new construction so i will need 2 hm expections for that as well with it being newly built? also do you have to get the hoi(homeowners insurance) through naca or thats something you get on your own and how is that amount factored if gotten through naca? is the escrow insurance the 50.00 mnthly fee naca req you to pay? and if no repairs do you need a funding for that escrow? also the pre-paid mortgage fees hows that caculated etc… and is the tax that you need based on what it would be monthly on the loan?

    #777
    TTrumble
    Member

    Hello augredbone,

    Once again, as in your previous post, your questions are all addressed at the workshop and you are “putting the cart before the horse” just a bit. You will understand how the process works after you attend the workshop.

    As for the success rate, you are clearly misinterpreting what you see. The fact is that the NACA Purchase Program has virtually a 100% success rate if you are willing to do what is necessary. Responsible home ownership is the foundation of NACA’s mission.

    The NACA program is not fore those in a hurry. However, if you are willing to do what is necessary to own a quality home with a fixed below market interest rate and genuinely affordable payment, we will work with you for however long it takes.

    Thanks!

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #778
    lrmatthews18
    Participant

    My figures were just to give you an idea. They could be lower or higher, but most people I speak with had to save between the ranges I listed.

    I’m not 100% sure how PS works if you your monthly payment will be less than what you pay now. I would assume you wouldn’t have PS as long as you are making your current payments on time now.

    You don’t get homeowner’s insurance through NACA, that is something you get on your own.

    The escrow insurance is NACA’s estimate on how much your homeowner’s insurance will be every month. Your $50 NACA fee is something different.

    If I were you I would go to the workshop. You have nothing to lose and everything to gain.

    #784
    Gtguy
    Participant

    I recommend you stop the ROBO-Calling of individuals in the State of Georgia. I have reported a complaint to the Do NOT Call registry. I understand you’re not selling anything per se, but it is NOT OK to blindly call people on some list when they are registered on the DO NOT CALL Registry.

    Thank You.

    #797
    TTrumble
    Member

    Hello Gtguy,

    NACA only makes calls to the phone numbers that show in our records as belonging to NACA members. If you received a call and are not a NACA member, your number may have previously belonged to a NACA member. Please call our Member Services department at 888-404-6222 and our staff will work on correcting the error.

    #800
    soanxious
    Participant

    Hi Tim, have you seen my email from yesterday morning? haven’t heard back from my MC as yet and needed you or someone/anyone to take a look at my file.

    #812
    TTrumble
    Member

    Hello soanxious,

    Sorry about the delay in replying. I am terribly backlogged from the long holiday weekend. I am responding to messages in the order I receive them. Please bear with me.

    Thanks!

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

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