Unexpected emergency expense advice

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  • #65196

    Hello All!

    i am pending NACA qualification my file was sent to underwriting this week, unfortunately  I was involved in a car accident which will cost me 2k to repair my vehicle. I have been exceeding my payment shock for months and i have over two times my amount for MRF saved in my bank accounts. I have the following questions regarding this issue:
    1. Will this be covered with a LOE for emergency expense?
    2. Should i use a credit card with existing balance or transfer the 2k from my savings account to pay for the repairs?

    Thanks in advance


    Hello @Gene404,

    Sorry to hear about your car accident! That is unfortunate.

    To answer your questions, an LOE might be enough. In the NACA workbook, I believe it mentions that exceptions can possibly be granted for emergencies and extraordinary circumstances. If you have demonstrated payment shock every month without fail, an LOE might be enough to explain what happened and won’t count against you.
    For question 2, Seeing as how you have more than enough MRF in your savings, I would use that to pay for any expenses, instead of putting it on a credit card. Putting it on a credit card will increase your balance and could throw off your DTI ratio, effecting your approval amount.

    Definitely try and reach out to your MC and explain the situation, though before doing anything!

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