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No, I understand exactly what you are saying. It’s just extremely unusual. I applied to two different lenders while going through NACA and they did hard pulls to determine interest rate and DTI. But nothing is going to show up as an open loan until the loan has been funded and that doesn’t happen until after you have signed your closing docs. It is extremely odd and would be an issue for the credit reporting agencies if it happened as a result of a loan application for pre-approval.
So your’re just referring to a hard pull credit inquiry and not an open loan. If it was an open loan it would have a payment associated with it. An inquiry just shows that your credit was pulled and by whom. That will not affect your DTI.
@Nelsont You applied for a mortgage to shop around for rates and loan amounts and it immediately showed as an open loan on your credit with a balance? That is abnormal and likely a credit reporting violation. What bank/lender did that? They should have done no more than a hard pull to determine your DTI. Did you have to contact the credit reporting bureaus to get it removed from your credit? I have never heard of that happening before. Hard to believe honestly.
You can get pre approved at as many banks as you want to compare out of pocket costs, loan terms etc. They will show up as a hard pull on your credit and you would need to write an LOE for NACA indicating that you were shopping around Applying for a loan is not the same as closing on a home. You won’t have a home loan show up on your credit until at least a month after your actually close, so nothing would affect your DTI unless you buy the home. Even if you go all the way through underwriting and the loan falls through. Nothing is going to be on your credit until you close especially not just an application.
@marathon is correct. With NACA you have to provide 3 months of bank statements preceeding qualification and credit access. You would have to source that money if it shows up in those bank statements or it can’t be used for anything at all. So in essence you would need to deposit that money well before you anticipate being submitted for qualification.
For example, my contract listed a land survey fee of $600. This was not covered by BOA as part of the closing costs. I had to formally reject the survey so as not to be personally responsible for the fee at closing. Please double check with your builder and/or MC so that your aren’t on the hook for the admin fee.
@Mercadodc I wouldn’t be so sure about that. I would inquire with your builder as to what the admin fee is for. There are only certain costs that are covered by BOA as part of your closing costs. I don’t think “administration fee” is one of them. I’m speaking as someone who closed on new construction with NACA.April 28, 2022 at 1:43 pm in reply to: One of the three credit agencies says I have a collection on my account. #79239
Qualification workbook pg. 32 under the heading Charge offs And Collections “Any charge off or collection that happened more than 24 months ago rarely need to be paid off and only require a letter of explanation to address any current balance.”
Also medical collections are not required to be paid off. I would defer to your MC as to whether you need to pay off the collections. I would also advise against disputing accurate collections. It can cause more damage than good.
I would clarify whether they were referring to a deposit or a down payment. Your title days down payment, but your post indicates it would be applied to escrow. A downpayment, if required, would not be held in escrow. It would be applied to your principal at closing. The deposit on the other hand woukd be required upfront and could be applied to your escrow or prepaids. Additionally, there is no down payment required for a NACA loan. It is a 100% financed, conditional loan. Sounds like you might have your terms mixed up.
I closed on new construction in 2020. The deposit for using their preferred lender was less expensive than the one required for using any outside lender including NACA. It was written in the contract and very much legal.
Your MC should be able to provide the LOE needed for lump sum transactions. You can also find it on the NACA FB page. I would inquire about the NACA approved title company from your MC.
The form 4506-C is to allow BOA to obtain your tax return transcripts directly from the IRS and the declaration & premium page will be provided by whomever you select as your HOI provider.
Unfortunately there is no way to rush through the process. Payment shock is calculated by evaluating the spending of your monthly income. Monthly income- spending= savings. So while you may have provided 3 months of your savings account statements, you will need to demonstrate that you have also budgeted appropriately through your checking account statements. Once you are qualified you may be allowed to provide a transaction summary as proof of funds/ balance, but there are no shortcuts prior to qualification.
I can’t say for sure how BOA is determining your income, but what I do believe is that they look at both your prior years W2s and current paystubs to see how your income is trending and if you are on track to exceed the median income for your MSA. So if your current YTD gross and expected future income including trending overtime and bonuses indicate you will be over the median income for the MSA…non priority.
@Whall6 I’m sorry. Have you tried searching for tracts within the MSA that you are looking to purchase? Go here https://www.ffiec.gov/census/default.aspx and look up your city. You can still purchase in tracts that have a median household income that is <100% of the MSA. If you can find a tract that has a median household income less than 80% of the MSA, then you can qualify for the lower priority interest rate. Don’t give up just yet.