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REFINANCE
I will be quick to lay out my situation, and I am curious if there are any FHA Manual Underwriters who can do loans in Phoenix, AZ. I’m still working with my broker now but it’s been several months and
still no closing. I’ve refinanced FHA in the past with no issues, and this time, it almost feels like the banks are not approving these loans, even though they are advertising historically low rates.
1. I have had stable employment for two years, coming up in August. With my existing employer, my employment type changed from 1099 to a W2 in April 2019.
2. I have never missed a mortgage payment nor applied for COVID-related deferments.
3. My DTI isn’t the best, but my income has increased since the last time I did an FHA refinance several years ago. My FICO is over 680.
4. The purpose of the refinance is to merge my primary and secondary (HELOC) into a fixed low rate. I do not know what the max LTV ratios are but I’m pretty close to the max if it is 80%. However, I can bring cash to close if required.
5. Increase in income, stable employment, no missed payments on my mortgage EVER, and Quicken denied my refinance and would not tell me why a week before closing. I told them I’m never doing business with them again. I tried working with Northstar, Interactive, and now United Wholesale Mortgage, and it’s been literally three months and still no closing.
Is there something going on with FHA refinances right now that I’m not aware of? United said they are working on a manual underwritten FHA refinance but I have gotten absolutely no feedback in a week and am beginning to think the deal may be dead. If I don’t hear an update by the end of this
week, I’m going to pull it and place it somewhere else, unless there is a reason why this can’t be done that isn’t being disclosed to me.
Am I missing something here? Do I just have the worst luck in the world or is there a bigger problem brewing?
How long does a manually written FHA refinance typically take? If you feel you can do a manual FHA refinance, please contact me. DO NOT WASTE MY TIME WITH CONVENTIONAL AS I TRIED SEVERAL TIMES AND IT WON’T GET APPROVED.
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1 Reply
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I can understand your frustration with the difficulties of an FHA refinance. Consider these suggestions, which may make more sense of your situation.
Current FHA Refinance Landscape
Market Conditions: Depending on the economy and interest rates, lenders’ penetration in any given market might change as policies are standardized within any given company. In such cases, lenders lower their requirement thresholds, which may create unnecessary bottlenecks in the system.
Manual Underwriting: Contrary to automated underwriting, manual underwriting requires a more detailed approach and often requires a longer conclusion period. This could also be the reason for the combination of the paperwork you have endured, as the documentation process may take considerably more time in some cases.
Your Situation
Secure Employment: Your case has a very strong point regarding over three years and upwards of two W-2 jobs. However, to receive positive feedback regarding this assumption, ensure your lender receives all relevant and sequentially required papers.
Good Payment History: Considering these are the only sore points to satisfy your case, never missing a mortgage payment in your record is remarkable. The fact that most other criteria in your application should also be met leads me to presume a positive outcome.
DTI: Agreed that a high DTI may be cause for concern, however, as your income has considerably increased, this is likely to help her logic. More than likely, expect the factors influencing your DTI ratio to come into play more than often.
LTV Ratios: Generally speaking, FHA loans could have high ratios, subject to specific lender provisions. If you stand at nearly 80%, having some cash to close could bolster the case you are trying to build.
Feedback from Lenders: While I understand this has been your experience, poor information flow between you and lenders is regrettable. However, there’s always a silver lining to every cloud. Stay constructive and ensure you’re ringing the likelihood for updates quite often.
Recommendations
Seek Specialized Lenders: Target lenders who are more versed in dealing with FHA-insured loans and manual underwriters. They might deal with more problematic scenarios, such as the one you are in.
Documentation: The completeness and clarity of the relevant documents are ensured. Remember to include copies of tax returns, pay stubs, financial documents, etc.
Consider a Mortgage Broker: If you are not currently working with a broker, find someone experienced in getting FHA manual underwrites. They could have the right connections, which helps, and they are more intense on follow-up.
Timeframe: Manual underwriting can take some time, and it should be familiar to you if it falls within weeks of the appointment. Chat with your lender for the required information.
Alternative Options: If you do not receive timely feedback from United Wholesale Mortgage, it would be best to immediately commence searching for other lenders. Sometimes, it does help to have other lenders view your case.
You are among many who find the current refinancing scenario difficult and frustrating. If you choose to look elsewhere, you can contact one of the local lenders in Phoenix, AZ, who are known for performing FHA manual underwrites. Good luck, and I hope you are able to sort out the situation quickly!