Process after saving

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  • #70588
    ebronston
    Participant

    Hey everyone! I have an appointment November 11 but I already have my Payment Shock amount I will need. What is the process or what happens if I go into the appointment showing already 3-6 months of savings? Will this speed up the process?

    #70589
    ebronston
    Participant

    What if I don’t have cancelled checks or money order for my last 12 months of rent?

    #70590
    Nelsont
    Member

    First of all payment shock must be continued every month until you close on your house. This is a common misconception and members often confuse the idea between payment shock and mrf.

    Mrf is a minimum value in savings that must be reached in order to cover expected costs associated with buying a house including building up a safety net of 2 to 3 months of mortgage payments to keep in the bank for a rainy day after you close. It’s actually recommended to have 6 to 12 months. Naca cuts the requirement to make it easier to qualify. They also require it when it’s usually not required which also puts members in better position.

    Payment shock however is not a goal to reach like mrf. You will be required to maintain payment shock without fail until you close. The reason is because you need to demonstrate you can actually afford a mortgage that is often in naca members cases higher than your rent. Rent plus payment shock is viewed as making that payment and just like mrf or missing a payment or taking out a new loan or any single one of the qualification requirements you can risk losing your qualification and starting the process over if you don’t meet it every month. Having the 3 months before qualification is simply to build good character just like having 2 years of employment.

    If you already have 3 to 6 months then by November you should have 7 to 10 months. Depending on your situation it could speed up the process. It will definitely not hurt and will check off one of the requirements.

    If you don’t have cancelled checks or money orders for rent then you need to get them. This is not a naca requirement. The us government will not allow banks to issue mortgage loans without this. If you pay online that is considered a check because you use your routing number. If you use venmo that is ok as long as you can print the documentation out. Screen prints and phone pictures aren’t acceptable. If you pay in cash that needs to stop.

    You have definitely started on the right path. Good luck!

    #70591
    ebronston
    Participant

    Thanks for your reply. So what you are saying is it will be a year from now before I would qualify fora home based on no canceled checks or money orders? What if you live with someone and don’t pay any rent but you want to buy a home? There has to be a way around this if I do not pay rent.

    #70592
    Nelsont
    Member

    There is indeed a way around it. You get who you’re living with to write a letter of explanation. The letter needs to detail who this person is in relation to you, what the address is (it needs to match your id and your bills), specific dates you lived with them and whether or not you contribute to household expenses. It doesn’t matter if you do or not the underwriters just want to match up your bank statements. Then they need to wet sign and date the letter. If your intake is november 11 then it will need to say you lived there through November 11 and dated November 11. This letter is basically an affidavit so it will need to be updated with new dates and a signature at every step in the process up until you close.

    If you live on your own or pay cash and can’t provide the letter then there’s no way around waiting for a 12 month history of trackable payments (government requirement). Otherwise the letter is gold.

    • This reply was modified 2 years, 2 months ago by Nelsont.
    #70595
    ebronston
    Participant

    Great thank you!

    #70610
    sneakerz4me
    Participant

    @Nelsont if rent payment is documented on bank statements either from check or electronic transfer, what would be the best way to provide that on the webfile? Should I just upload twelve months of bank statements?

    #70619
    Nelsont
    Member

    Try to get images of the canceled checks. If you upload a bank statement in lieu it might work but I can envision a condition asking for the check. Your MC will have the best advice.

    #70625
    sneakerz4me
    Participant

    Thanks

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