Profile picture for DaleKlonin

Nervous about loan process

Hi,

I am in the middle of buying my first home. I have been pre-approved for $170k VA loan. I have OK credit above the 640 VA minimum requirement and a low debt to income ratio of about 25%. My total income for last year was $71k but if you take out my earned overtime I made $61k. I have a student loan with a $14k balance and a small line of credit with a $2k balance. The only other thing on my credit is a medical bill I have been disputing. 

My loan officer says everything looks good, but now its up to the underwriter. I cant shake the feeling this thing will derail and I wont get the loan. Can someone ease my troubled mind? 


Thanks! 
  • December 31 2013 - US
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Answers (6)

Best Answer

your credit score is fine, your debt to income ratio is fine, and VA doesn't require you to pay off a medical collection. The lender can use your overtime income as long as you have received it for the past 2 years and the amount can be verified through verification of employment form your lender will send to your employer. Once they have verified your OT earnings, they will take a 2 year average.

I am sure you are fine. However, if you are preapproved and not already in escrow, you can always shop around for a 2nd opinion. Your current loan officer should be able to put you at ease, so that you don't worry about your loan approval.

In the mean time, don't charge on your credit cards, open new credit, or miss any payments on your existing debts. If you have already done any of those, you need to let the loan officer know ASAP. We just had a loan get suspended because the buyer bought a new car and the file had to go back to underwriting for a 2nd review. It should still be OK, but they won't be closing on time and the seller is pissed!
  • December 31 2013
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I don't find any major reasons of why you should be denied. Unfortunately, there are cases where unforeseen circumstances come up to kill the loan, but that seems unlikely for your situation. The best thing for you right now is to sit back and relax until underwriter's decision is made. In the mean time, do not make any big purchases or cause damage to your credit. Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • December 31 2013
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Profile picture for DaleKlonin
I have been fighting the medical bill for a while. Long story short, they billed me for service out of network when I was assured by my physician everything was in network. The big kicker is the provider became in network 4 days AFTER my surgery. My insurance paid part of it but they are coming after me for the balance. 

My loan officer is aware of it but doesnt seem concerned. I have disputed it on my credit and I have not received any collection calls since I sent my last email to the provider. I would prefer not to pay it since it is an unfair bill, but if it gets me my house, so be it! 

 My loan officer said the only thing he saw which may be an issue is how they factor my overtime into my income. 

Thanks everyone! 
  • December 31 2013
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As long as you have been on your current job or in the same line for the last two years, and you had overtime in your income during 2012 you should be fine to use the $71K. If this is your first year with the overtime, then it cannot be included. The other stuff is "small potatoes" but the dispute must be removed before the loan can be approved.
  • December 31 2013
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Profile picture for Outer Banks N C
Loan officers are suppose to get everything in order for the underwriter to review to approve or disapprove. Most loan officers know what will fly and what will fail and if you are this close you should be well on your way. Underwriters do often ask for more documents or explanations before they approve. They might ask for an explanation of the medical bill but I bet you will be fine.

tim
  • December 31 2013
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Profile picture for daveskow

Ask the  loan officer to run  your  loan though their  automated  underwriting system ( AUS)  using the lower  income  and ask for the results  from your loan officer

Also - specifically ask your loan officer to review and  research the medical collection  to determine  if you need to settle this before closing

  • December 31 2013
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