Around October 1st our rep sent in all our info to the lender for an FHA loan. Finally last week I get a call thinking I would get an answer. But no, they needed more info.....rental history and other bill history....which was all good, nothing late. This was last Monday. Is it a good or bad thing that it is taking so long.....from what i have read if they were going to turn us down they would have done it already. We were preapproved. Any advice would be appreciated. My stomach is in knots and I am scared to even start thinking about paint colors for the new house!!!!!!!! Oh yah, credit score 705 and very little debt to income ratio.
2007-10-23 15:19:47 · 8 answers · asked by whiseants1sthome 1 in Business & Finance ➔ Renting & Real Estate
I can close an FHA loan in a half hour...max!!! Not really, I just wanted to jump on the bandwagon here.
Seriously FHA turn times(the time to get to and out of underwriting) are slow at a lot of banks right now. Just due to the fact that there are a lot of applications for that program and it really does take a little more work than your standard loan. The time frame your giving is still a little bit long, but it's nothing totally out of line for how backed up most banks are. I know it's frustrating to wait, but you should have the answer soon. The bad news here is that pre-approvals really don't mean anything, your file still has to go through the whole underwriting process.
There are a lot of situations where FHA is the best deal on the market regardless of how high your credit score is. I wouldn't take the advice of someone who hasn't reviewed your whole file over your current loan officer who has. From the bill history you mentioned, I'm assuming you don't have many accounts on your credit report. The use of alternative credit without penalizing your interest rate is one thing the FHA program does very well. Either way, if you're comfortable with the loan terms it really is a great program.
Good luck and hang in there!
2007-10-24 05:13:25 · answer #1 · answered by matzael 3 · 0⤊ 0⤋
FHA does take some time - there's a lot of extra bits that need to be verified and underwritten manually in some cases. Sounds like there may be a lack of communication from your lender - you should be kept in the loop!
I'm wondering why your lender chose FHA with a 705 score and low debt-to-income. There are other 0 down payment options that have less cost, no origination fees and minimal PMI. There may be something else I'm not aware of though. Did your lender offer you a variety of options?
I've included some links that might help you. Check them out and let me know directly if you have questions.
2007-10-24 09:54:15 · answer #2 · answered by Quicken Loans 5 · 0⤊ 0⤋
I do FHA loans all the time. They do not take this long. It sounds like your lender does not know what he or she is doing. Civil servants do not do FHA loans. The loan is insured by the government but approved lenders process and underwrite them. Since you have a score it is unusual to have to provide a bill history. This is normally done for nontraditional credit meaning you do not score. Have they even ordered the appraisal? These are more in-depth but the general approval process should not take this long. I can get a FHA loan closed in 1-2 weeks. You need to seriously question the lender about the turnaround.
2007-10-23 16:29:03 · answer #3 · answered by yourmtgbanker 5 · 0⤊ 0⤋
Ok, you need to CALL your mortgage broker and ask them why they are putting you in an FHA loan when you have very little debt and a 705 score. That's ridiculous...you can get a much better deal if they will just find you one.
What happened was that your loan officer didn't take a complete loan application (which is poor customer service) and that is why they had to call you for additional information.
What I would do tomorrow, is call your LOAN PROCESSOR (not your loan officer) and ask them to send YOU a list of EVERYTHING that is outstanding.
Keep in mind, that FHA loans no longer require a termite nor an inspection, so these are things that you will need to ask for and do NOT take referrals from your loan officer for these services, get them from friends.
Don't let your loan officer hand you some BS that if you change the loan program that it can take another two weeks for approval...that's pure BS, and once everything is in, it can be done in a DAY.
Tell him if he can't get you a better deal, you'll go somewhere else...and with your credit score you easily can.
PS: The above poster that said FHA loans take 45 days for approval...obviously is not familiar with how they are done.. They are NO DIFFERENT than any other loan program. When you work with a DIRECT lender, I could always close a loan as quickly as the appraisal came back, and that was about two weeks on average.
2007-10-23 15:36:17 · answer #4 · answered by Expert8675309 7 · 1⤊ 2⤋
FHA can take 45days for closing if you work with the average lender.
most loan officers never did a FHA loan...
if you have 2.25% down payment, and NO CREDIT LATES in the last 12months ...then you should be good.
it should take 3-4days for an approval. I would shop around if they're taking that long
* I have done many FHA mortgages....I also work with DE Underwriters who underwriter FHA Loans. Not only does the applicant need to qualify....but the Property needs to meet FHA guidelines. You can have a 800 score...but if you had 1 credit late in the last 12months...the Underwriter can deny your loan.
2007-10-23 15:30:41 · answer #5 · answered by Anonymous · 0⤊ 3⤋
Tighter lending practices means more paperwork, more due diligence by the lender.... takes time. Be in constant communication with the lender to follow the paper trail to a closing. You are the client and you need to understand the status!
2007-10-23 16:38:32 · answer #6 · answered by Carly Jacks 6 · 0⤊ 1⤋
Pre-approval and fifty cents gets you the daily newspaper. The FHA is not noted for being speedy and you are just going to have to live with it; after all civil servants rarely get overtime, and they aren't going to go double the effort on straight time. So grin and bear it.
2007-10-23 15:52:52 · answer #7 · answered by cattbarf 7 · 2⤊ 0⤋
It could be because everything seems to be bogged down in the system.
Have you contacted your rep? and if so, what do they say?
Instead of worrying, why not focus your energy on something positive?
2007-10-24 03:50:38 · answer #8 · answered by Christiane 3 · 0⤊ 0⤋