June 19, 2020 at 9:45 am #69549
We became NACA Qualified on Wednesday and were able to access our Affordability Form. I noticed that our payment shock savings were not reflected in our form. It says we have $0 payment shock savings but we have been saving $700+ every month for 4 months now. It is being put into a savings account each month and we have provided documentation to our MC proving so. He said the documentation was good but it is still not reflected and he did not relay any issues mentioned by underwriting.
We also noticed that the Gross income amount is incorrect. The amount they have noted is $1154 lower than our actual gross income according to our paystubs. My husband’s employer does pay an insurance allowance each check but we pay for our insurance through my employer. Even if we were to remove the insurance allowance from the gross income the amount that they have listed in still $471 less than it should be.
I cannot figure out why this information is incorrect. @TTrumble please help us understand what the issue is and if possible help us get it fixed. We had 2 houses we wanted to see tomorrow (since we thought we were approved for the amount discussed with our MC). with this amount being so far off our NACA realtor will not show us the houses because they do not fall under the affordable monthly payment.
Thanks for your help.June 19, 2020 at 12:11 pm #69559mtvParticipant
Hi @the4byrds, I was just on the phone with member services because our form is incomplete. It doesn’t show the maximum purchase amount & purchase area. They said contact the mortgage counselor. I’m waiting for the MC to email back.June 19, 2020 at 12:14 pm #69560
Update: They corrected part of the income discrepancy but will not include his insurance allowance in the gross income even though it is part of it, we even have a letter stating so. What can we do?June 19, 2020 at 12:24 pm #69561NelsontMember
My take is that the allowance is not earned income. It’s technically a bonus that will be nullified if you choose to buy insurance with it. Because it’s not a personal or company bonus. It’s official designation is to buy insurance. It just so happens you are pocketing the money but, that’s to use not to save is the official intention. I could be wrong but, that’s how I see the bank viewing this scenario.
June 19, 2020 at 12:28 pm #69563TTrumbleMember
- This reply was modified 2 years ago by Nelsont.
I’m going to take an educated guess here, based on something you wrote.
If you have zero Payment Shock Savings, then you should have been approved for your current rent amount since you would not have been asking for a monthly payment larger than your rent. As such, how much you were saving each month is irrelevant, but while you stated you had zero Payment Shock you also mention your savings as if it were a factor.
So, one of two things happened:
1) You mistakenly assumed that the savings would automatically get you a higher qualification amount, but “zero Payment Shock Savings” means you are only seeking to be qualified for your current rent amount, and that’s all you would have been approved for regardless of savings pattern. If you want more than your current rent amount, you have to ask for it and then show a consistent Payment Shock Savings. It’s not automatic.
2) You only wanted to be approved for your current rent amount, but either your current debt-to-income ratio wouldn’t allow it (too much non-mortgage debt) or your current rent amount already exceeds 31% of your gross monthly income, the housing-to-income ratio limit.
All that having been said, please email me with your name, NACA ID number and Forum screen name so I can take a look. (Let’s see if I get to keep my Sherlock Holmes Fan Club card… 😉 )
Online Operations, NACA
email@example.comJune 19, 2020 at 1:18 pm #69570
@Nelsont what you are saying definitely makes sense. However, I believe this may be slightly different as this additional income is listed on every paycheck at an hourly rate, not as a bonus amount. We were able to talk to our MC and he is going to check into this further… so we will see. He did also let us know that there is no guarantee that they will accept it. I definitely appreciated his candor as opposed to being blindsided.
Thanks for your input.June 19, 2020 at 1:33 pm #69571
Hi @TTrumble, we did request approval for a monthly payment higher than our rent. We were able to speak to our MC and he assured us that the Shock payment pattern has been included in our file but because our income amount was listed so much lower than expected the debt ration reduced the amount we can “afford” to just under the amount we pay for rent. He did find that my income was entered based on my 2019 w-2 but I make substantially more now so that has been corrected, increasing our affordability by more than $400. Now if we can get the insurance allowance added in we will be back in business and can put an offer in on our dream house!
Thanks for your help, I will email you my info.
- You must be logged in to reply to this topic.