Weddingbee boards

So, if you've been following my threads, we finally after a ton of hoops, got our offer accepted. Finally got the inspection completed. Finally even picked out the appliances and floors we would put in.

Yesterday I brought all our financial documents to the bank. When I left, the mortgage broker was like, "OK, I'll be putting all this in and let you know if I need anything else." A few hours later I get a call from our Realtor, NOT the broker. (pansy)

"Hi, K. I've got some really bad and serious news. As of 2/28, a new regulation was passed that requires you both have 3 trade lines and you only have 2. You're no longer approved to get a conventional loan."

Um.... WHAT. So, we had OVER 40-45% to put down. We were approved for the full price of the house, but only needed just about half of that on the mortgage. The reason we have money to put down, is that we're both REALLY big on only buying what we can afford. i.e. Our cars are paid off, no student loans, etc. FI got a line of credit (and already paid it off) to buy my ring and that was his 3rd. I only have 2. So, in order to get a conventional loan, I have to go open a new credit card and wait about 3-6 months for it to get a "history."

WTF - I'm being punished for being smart with my money. This is apparently a Fannie and Freddie regulation, which means, just about every bank we attempt to go through would have this. Anyone know of a bank which DOESNT report to F&F?

HOWEVER - We're approved for a FHA loan. Meaning, we're only required to put down a little bit, you've got PMI insurance, etc. i'm not entirely sure of what happens if you go with a FHA and you put down more than 20%. I thought the PMI would go away but we're not sure. Also, the interest rate is usually higher.

I'm just beyond frustrated. Part of me is thinking maybe this is God's way of saying, "goodness how many hoops do you need to make yourself jump through before you see my plan." Part of me is wondering if it's just the way things are these days post bailout. Even my dad the day before closing wasn't sure he'd get his loan, and he's a Oil Co. Exec.

I'm just beyond words right now. We have time to establish a new line of credit on me before the wedding.... but we'll loose this particular house and the $8,000 tax credit. As of last night I thought we were going to let it go, but FI this morning called and wants to exhaust a few possibilities first.... So, I'm off to call a few places and see what's what.

Basically, we need your thoughts and prayers. I'm just glad I didn't turn in my 60 days notice yet :-(

Unfortunately, he got hurt at work about 2.5 years ago and his income suffered a lot because of it. He doesn't have a strong enough work history from the past 2 years to qualify on his own, he needs my income, I need his credit :-(

I'm about to talk to a financial advisor, I'll put the idea out there but I highly doubt adding me would "fool" anyone :-/

Oh, man, I can only imagine how shocked and disappointed you must be. I hope that it works out for you, or maybe this is a sign that there is something better waiting for you? Good luck!

I think Corgi has a good point.  Just apply with the FHA loan and refinance when needed.  Talk to the realtor or mortgage lender to discuss the details of this.

I dont think this is God telling you to walk away.  Buying a house is hard.  If everyone walked away when issues like this came up, I doubt anyone would be in a house! 

It is very stupid you are being punished for not having enough history.  I have had 2 credit cards open for a while (over 2 years) and they still identified them as "new" accounts.

I am with Corgi on this one...For FHA loans, if you put 20% or more down, you don't have to pay PMI. Also, this will get you in the home you want and you can refinance at a later date.

Bummer! Hope everything works out for you!

We're being told that no matter how much we put down on a FHA we HAVE to pay PMI for 5 years. Even if we put down 45%

Here is a link that provides some additional info. I don't think you are being provided with accurate information unless the rules have recently changed.

http://www.ehow.com/facts_5272265_do-pay-pmi-fha-loan.html

I will also paste it in...hope it fits

Do You Have to Pay PMI on an FHA Loan?

PMI stands for Private Mortgage Insurance. This is an additional fee added on to a home buyer's monthly payment that is paid into an escrow account to protect the lender from loss in the event of default. The amount of PMI that is paid is typically 0.5 percent of the total loan amount and is added into the monthly payment for all loans. Knowing the rules for PMI and how they translate in FHA loans is important in determining your overall affordability of a monthly payment.

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Ya, i've yet to see anything anywhere saying that I would still be paying PMI or MIP or something....  I mean, I don't get what the H is going on....

I've been on the phone all day with mortgage brokers and what not, I feel like I'm going to explode. 

Jamaica is correct, it is not technically called PMI if you do an FHA loan.

http://www.fhaloan.com/fha_article.cfm?id=19

IF THE FHA INSURES MY LOAN, WHY DO I HAVE TO PAY A MORTGAGE INSURANCE PREMIUM?

Mortgage insurance is a standard part of buying a home. It’s a requirement on both conventional loans and FHA guaranteed loans. The mortgage insurance on conventional loans includes what’s known as Private Mortgage Insurance. To get an FHA loan, you pay what’s called an Up Front Mortgage Insurance Premium or UFMIP for short, plus a monthly Mortgage Insurance Premium or MIP.

HOW MUCH DO I PAY UP FRONT?

The cost of Up Front Mortgage Insurance Payments is calculated at 1.75% of the base loan amount. You have the option to include this amount in your FHA mortgage. Ask your lender how this works.

HOW MUCH DO I PAY EVERY MONTH?

Your monthly mortgage insurance includes a premium of .55% of the loan amount. You pay this every month for at least five years. There is no set amount of mortgage insurance or fixed rate which applies to all borrowers since UFMIP and MIP rates are determined based on the amount of your particular FHA mortgage or FHA home loan.

WHEN DO I STOP PAYING?

If your FHA loan lasts 15 years or more, your MIP will be cancelled when the loan-to-value (LTV) reaches 78%. This is calculated based on the original value of your FHA home loan and only if the borrower has paid the annual MIP amounts for at least five years. For FHA mortgages with terms of less than 15 years, monthly insurance payments or MIP stop when the LTV reaches 78%.

The kind of insurance the FHA offers your loan and the kind of mortgage insurance payments you make as a borrower are quite different. It may interest you to know that people taking out conventional home loans are also required to carry mortgage insurance. Terms may be different between private mortgage insurers and the kind of insurance required by the FHA, but the basic coverages are similar. If you are unsure of terms, specific length of time you must carry mortgage insurance, ask your lender to explain the UFMIP and MIP programs in detail.

Nope. Even though we were ratified before 2/28 it's because we weren't "Closed" before 2/28

UPDATE:

I don't have the energy to explain too deep, but after about 20 phone calls, and literally spending the entire day on the phone, we have a pending CONVENTIONAL mortgage with USAA for just about the same interest rate as Bank of America (who was giving us all the shiz. And for the record, USAA thinks it's ridiculous too they want me to have more debt to give me debt). They are fed-ex'ing a packet to us to sign and return. We're now looking at a closing date of April 5 (hopefully the sellers are OK with that). I can't imagine a way this could fall through.... so fingers crossed as i'm sure there is always a possibility.... 

For now i'll leave it at that. I have so much I could say but I'm waiting until papers are signed for the chain of events that made this possible.  I'm beyond mentally and physically exhausted. Ugh.... But again, So thankful for USAA. I don't know how they can keep topping their self... but they manage to continually do so.

Ms.Teddy - They truly are the BEST! I already have my car insurance, renters (and pending homeowners) insurance, credit card, and life insurance with them. Now we'll have the mortgage with them and I'm so happy. We were given the old brokers name and it wasn't until we were pre-approved I knew it was with Bank of America. I've NEVER liked that bank (I've had other bad experiences) and I have heard nightmares about buying and selling using them... I am indeed glad USAA stepped in to save the day.

I'm honestly just completely emotionally and mentally exhausted still. It's SO ridiculous. I just want it all to be done with.

I am so glad it worked out!!! Yay! Congrats :) Hopefully you'll get the closing date you want!

For us, FHA is not better. We've analyzed them both and we're getting a much better deal on the conventional... which we have now.

Can't wait for April 5th.... 

Are you planning on fixing it up before you move in? If so, what's your move-in date? There is no point to this question, I'm just curious :)

KLP - That is wonderful news to hear.  I know you are so exhausted but it really will make the house so much more worth while!  Maybe start thinking about the awesome housewarming party you can have!

If this does all indeed happen, my mom's going to come visit for a bit! That's pretty exciting, because then I can take her to the store and she can finally see the dress I got in person! She wasn't a huge fan of it, so hopefully that will help... but we're already phone confencing colors and such. She's a great interior designer, and I still think she should get paid for it. Unfortunately, a lot has to be done before she gets here :-( 

But, yay for mom trips to visit!