Loan Approval "Ryland Mortgage"

Eric22174 · Joined: 30 Dec 2009 Posts: 4

Hi,

I am currently in the process of building a new "ryland" home. I started the approval process back in October of this year "09". We received a pre-apporval including the loan paperwork weeks after discussing the terms of the loan. "FHA 30yr fixed rate" Locked in at 5% with a one-time float down option...30 days before closing. The house has not started and is expected to close sometime by the end of March. Ryland set me and my fiance up with a monthly down payment plan which Ryland agreed to. We gave a 3500 earnest money deposit along with two payments of 1394.00. We have to pay that until March. Well i see that the U/W wants to see the funds 30days prior to closing. If Ryland gives me a document saying the I owe payment in March and the house gets finished sooner then later...should they still honor the payment plan? Even though they want the money in there 30 days prior. It may sound confusing.

On the other hand.....me and my fiance have credit scores in the 750's. We have a front end debt to income ratio of 18-23% and a total of 36%. The purchase price is $339,000. Our gross monthly income is $9300.00 a month.

I did do a cash advance recently off my credit card that posted in my checking account over $2000.00. The money was paid right back out of my account a week later. Should the underwriter look at this an frown? I have done small cash advances for 50.00 here and there. I get charged no fee and 13.99%. It's a steal. I don't see where it would hurt. What do you think? Cash advances during underwriting approval bad idea?

Eric22174 · Joined: 30 Dec 2009 Posts: 4

The cash advance was to pay my grandmothers taxes.

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

Eric

I think Ryland will expect that payment 30 days from whenever the closing is scheduled. So, of the actual closing date moves then your required payment would also probably move.

As far as the cash advances are concerned, it is never a good idea to have too much activity of any kind on your credit cards before the underwriter looks at your financials. However, they are looking at your credit report. That is where the credit card balance will show up. So, you need to find out when they are FINISHED underwriting the file. If this thing drags on, then they may pull another credit report and see the new activity.

Eric22174 · Joined: 30 Dec 2009 Posts: 4

The original loan documents expire on 2/24/2010. I will resumbit paperwork. The debt will be paid off by then....and/or lower then when i originally applied. If the bureau doesn't update quick enough i should be able to give them an updated credit card statement....correct?

m2c · Joined: 03 Aug 2005 Posts: 937

You might want to touch base with your LO. Large deposits must be checked as to source, you basically have unsecured borrowing, and there's some question whether payment of loan costs by credit card can be used to meet the 3.5% cash investment. It's all very innocent and understandable in your eyes but may be itchy in FHA land. Thinks there's something specific on unsecured loans but could not locate. Here's the closing cost via credit card wording.

4155.1 2.A.2.c Borrower Down Payment Requirement

The borrower must make a down payment at least equal to 3.5 percent of the lesser of the appraised value of the property or the sales price.

4155.1 2.A.2.d Policy on Closing Costs,

Closing costs may not be used to help meet the minimum 3.5 percent down payment requirement. Closing costs are not considered in the mortgage down payment requirement calculation for purchase money mortgages.

4155.1 2.A.2.e Credit Card Payment for the Appraisal/Credit Report

The borrower may use a credit card to pay for the appraisal and credit report. These costs cannot be considered to help meet the required investment.

Eric22174 · Joined: 30 Dec 2009 Posts: 4

What if the money was never used to pay on the downpayment. It should be easy to track since "Ryland" sees the deposits and holds the money. The month of the cash advance was a month that i had already paid in advance. The money was paid back a week later. So no money ever went towards the downpayment. I hope they understand that.

I mean it looks as follows on my banks statement

$3500 earnest deposit, paid sept
$1394 deposit, paid oct
$1394 deposit, paid oct

$2100 cash advance, nov
$2100 transfer from shares, paid nov (week later)

Should be easy to tell that no money was used for the 3.5%
Even more obvious was when I took my account down to literally nothing thereafter.

All closing costs are paid by Ryland up to $19,000.