Confessions of a Mortgage Reject (And Life After Rejection)
Dave and his wife started out using Bank of America. After being told they were “approved” on two separate occasions, the underwriter eventually rejected their file. They were officially turned down for the mortgage on May 31, 2011. After the Bank of America rejection, they applied with a smaller lender and were subsequently approved for the loan.The rest of this story is in Dave’s own words:
A Tale of Mortgage RejectionThis experience has been quite a roller coaster for us. But it turned out well in the end. In fact, it turned out better than we could’ve expected. That’s why I’m so eager to share out story with other home buyers. I want people to learn from our experience. I think people will find our story more useful than a lot of the “how to” articles online these days. It’s a real-world lesson in mortgage rejection.
So here it goes…
I’ve included a timeline below, so readers can see exactly what we went through (and how long it took). You’ll notice a big difference between the two lenders, as far as loan processing goes. Bank of America took a long time to process our application, compared to the smaller lender. We’re talking two months as compared to a couple of weeks.
Loan Application TimelineThis is the process we went through with Bank of America, leading up to the ultimate rejection on May 31:
We sent our mortgage application to the loan officer on April 3, 2011. We got pre-approved on the same day (based on our application and credit scores). On April 5, they sent us a list of documents they needed, such as tax returns. From April 5 up to the conditional approval, we had to provide copies of all ongoing deposits and withdrawals from our bank accounts. They wanted to know where our money was going during this period, and where the new deposits were coming from. We received a conditional approval on April 28, 2011. A conditional approval is when the lender says, “We will approve the loan if you satisfy the following conditions…” We satisfied all conditions and provided the requested info by May 4, 2011. One of the most significant conditions related to a credit card. We had to pay off a $12,000 credit card balance in order to lower our debt-to-income ratio [ defined ]. We were led to believe the loan would go through, if we complied with this request. So we paid off the card.Va Loan Application - News
"Rob, your reader's comments about Freddie's Relief program are similar to what is happening with the VA IRRL program. My company services the largest VA loan market in the country, North Carolina. For decades veterans were able to refinance using the
Total time from mortgage application to rejection = 59 days. * We specifically asked the loan officer about cash-reserve requirements in advance, at the time we applied for the loan. She told us VA loans had no reserve requirements.
These services include: VA claims assistance; medical benefits; VA loan application; education benefits; help with forms, letters, or communications with the VA; burial benefits; grave markers/flag holders; Ohio veteran bonus program; military injury
Call Bruce H. at (847) 256-1213 or visit www.bhcbe.org. The Village of Skokie Health Department offers a short-term infant/toddler car seat loan program. The program is available to Skokie residents and is ideal when young guests are visiting.
Some funders require you to secure a loan or other funding the same size as the grant. (Unlike a loan, a grant doesn't have to be paid back.) Federal applications ask for other paperwork, including a form disclosing lobbying activities,
The Difference Between VA Loan Eligibility and VA Loan Approval ...
VA home loans have two different stages for the first time home buyer. The first is the initial stage where the borrower applies for VA loan eligibility, which is simply the process of submitting paperwork to the Department of Veterans Affairs establishing that the borrower is a veteran eligible for the benefit itself.
The second stage is the VA loan application process, where the borrower works with a lender to get VA loan approval.
VA loan eligibility should not be confused with VA loan approval. Eligibility simply indicates that a veteran meets all the criteria required to take advantage of the VA loan benefit. That criteria includes doing a minimum time in military service, which varies depending on when the member joined up. The nature of service is also a factor–minimum requirements differ for active duty military as opposed to Guard and Reserve members.
Since there’s no single set of requirements which apply across the board for all in uniform, the VA has set up the VA loan eligibility system as a way to make sure all loan applicants meet the requirements. Proof of service and other documentation is needed before the borrower can be considered eligible to use their VA loan benefit.
Just being eligible doesn’t mean the lender will approve a VA loan application. That application is the second stage and much depends on the buyer’s record of on-time payments, income and other factors. Because VA loans are not considered “credit score driven”, the lender can’t just look at the numbers on your credit report and decide whether you make a good risk or not. Instead of credit scores, your credit history is a very important factor in the decision to approve or reject a VA home loan application.
But the lender cannot process the paperwork for the second stage without paperwork from the first stage. Before the lender gets to your application, he or she must know you have VA loan eligibility. It must be in writing from the Department of Veterans Affairs before the loan paperwork can be reviewed.
VA rules state, “Before processing and closing a loan for an applicant, the lender must ensure the applicant is an eligible veteran. Lenders should never close a loan before they establish eligibility, since VA cannot guarantee a loan for an ineligible veteran.”
If you want to apply for a VA mortgage, the first step is getting your eligibility established, but you don’t have to wait to talk to a lender. Banks that participate in the VA loan program are equipped to help you get your VA eligibility paperwork and in some cases may be able to get it accomplished for you faster than you would on your own. There are exceptions to this–some borrowers must apply by mail–but your lender can tell you what applies in your specific circumstances.
Va Loan Application - Bookshelf
Your guide to VA loans, how to cut through the red tape and get your dream home fast
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VA loan - Wikipedia, the free encyclopedia
A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of ... The VA loan application is a standardized loan application form 1003 ...
VA Mortgage Loan Application
Pre-qualify for a VA Home Loan by completing this application. Veterans can qualify for a VA mortgage up-to $729k
Veterans Administration Home Loan Origination Portal
You have reached VA HLC, the Veterans Administration Home Loans Origination Website. This site is to provide an origination portal for Veterans Administration ...
VA Home Mortgage: How To Get a VA Loan, Requirements, Costs
VA loans are often made without any downpayment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans.
VA Home Loans | Veterans Loan | Direct VA Loans.com
The Veterans VA Loan Resource Center. Prequalify for a $0 Down VA Home Loan Online, Research VA Mortgage Guidelines and Work with Veterans Loan Specialists