UPDATE: Help me not delay closing of my new house

[jlt19]

UPDATE: 

Because I'm sure everyone was waiting with baited breath, lol. By providing my bank statements for the past 8 months, I was able to prove/convince underwriting that all of the funds in our bank accounts (3 different ones with 360) can be used for closing. We got our commitment letter at 5pm yesterday and are cleared to close next Friday pending we don't apply for any new debt. I will say, I was furious with the lender's lack of letting me know about all of this and getting back to me, but they really did step up their game and put a rush on everything for me to get it to work. I do believe the processor when she said she didn't think that funds that were deposited 7 months ago would have caused such an issue, hence her not following up on the letter sooner. I won't promote them just yet, as I haven't closed, lol, but I'm also not about to smear the company everywhere either. 

Thank you all for the ideas and commiseration. Thankfully I didn't pull the trigger on withdrawing any of my IRA, so don't have to worry about any of those repercussions!




Has anyone started with a new broker/lender less than 2 weeks from closing and it gone through? 

Do you think a new company would be ok with the appraisal that was done by the other one? I mean, they hired an independent local appraisal company.

They've just been AWFUL since I talked to the first guy (broker/sales guy I guess?). The loan document woman hasn't gotten back to me timely at all, and even though I explained fully and honestly about a large personal loan we have to the first guy, who assured me it was all fine, now that I had to write it out, underwriting has said I can't use the money from that loan. 

Basically i took out a large personal, unsecured loan in December at 3.49% for 3 years to pay off our two car loans and my upcoming SL's that were set to start being due in January. Well, deferment continued so I left the money in savings, ready to go this September. 

But we're closing on the new house 2 weeks prior to closing on our current one, so I'm using that cash for part of the DP. NOW they're saying I can't use unsecured loan proceeds for the DP. Well, I mean, fine. I could have said I've used that $30k over the past 6 months for any number of things, but I felt honesty was best. It's all fancy accounting and as soon as our current house closes, it's all getting paid off anyway and you're selling the loan by then, so what the fuck do you care? 

I sent in that "explanation" over a week ago. I tried to follow up TWICE last week with the document lady and again this am. I was just told this am about the "decision" and how we could always close the same day as our current house. Um, NO we can't. That's not what our contract says.

So now I'm scrambling to find a new lender that won't make us do another appraisal (b/c it takes time and money and I don't want to bother the seller again) to get this done. And DH told me not to use an online company vs our realtor's suggested local guy and he's going to be so pissed when I tell him about this.

And I just got a cortisone injection in my elbow and the flare is already starting so I'm going to be miserable for the next few days on top of this stress. Yay.

[ellipses84]

Your Realtor wants this deal to go through. Have you talked to them? So does the person who is buying your house and their Realtor. Maybe they can get their local rec’d mortgage broker to expedite or use the last appraisal? The lag is usually in underwriting which they don’t necessarily have control over. Have they given you any other options?

I don’t think it’s dishonest to say you spent the loan money on expenses and saved your personal income to pay off student loans, assuming the personal loan wasn’t required to be used for that (usually if it is, some amount has to be directly transferred between financial institutions and not be put in our bank account).

[just]

2 weeks is really tight ... We changed mortgage companies with 3 weeks to spare but this was before covid. Our realtor strongly advised us to go small and local with the emergency mortgage since they have more incentive to get it closed and that was absolutely our experience. Also she recommended not sweating the rate too much since we could refinance later if needed - which is a dangerous game, but we ended up getting the same rate.

We were refused by USBank because I didn't have enough credit lines (despite them knowing that for 2 months before they pulled the plug). The smaller company's underwriting was more custom and so didn't care about that.

We decided to cut our losses and pay for the second appraisal - it was cheaper than losing the house - but of course this was before COVID scarcity, but if you can get it, you may want to just eat the cost. As it turns out I decided to fight the USBank appraisal cost because they had all the information that led to them refusing me before scheduling it - and I got that refunded.

[jlt19]

Jul 26, 2021 16:37:01 GMT -5 ellipses84 said:

Your Realtor wants this deal to go through. Have you talked to them? So does the person who is buying your house and their Realtor. Maybe they can get their local rec’d mortgage broker to expedite or use the last appraisal? The lag is usually in underwriting which they don’t necessarily have control over. Have they given you any other options?

I don’t think it’s dishonest to say you spent the loan money on expenses and saved your personal income to pay off student loans, assuming the personal loan wasn’t required to be used for that (usually if it is, some amount has to be directly transferred between financial institutions and not be put in our bank account).

I haven’t mentioned it to my realtor yet because I was HOPING my strongly worded email with a new explanation would suffice. But of course they haven’t gotten back with me.

The local guy is about $3,000 more in fees and .5% higher interest which is why I didn’t go with him in the first place.

The loan didn’t specifically say what it had to go towards and was directly deposited into my bank account. I should have just said it was for debt consolidation and been done with it.

I also don’t know why they aren’t using the $45k in my investment account as part of the ability to pay at closing because I’ve said from the beginning that was being utilized too. I’ve sent them all the statements and have even sent them screenshots of the transfers from it to my bank this month since the statements may not generate until after closing.

AND I stupidly paid off all the CCs this weekend so as to lower our DITI. So that was like $7,000 I could have left in the bank and just said it was for closing too because those bills aren’t due until after closing. And there’s no law that I have to pay them off in full monthly like I have for nearly 15 years.

To me, all the money goes into one “pot” but it’s separate on my spreadsheets. I guess I just figured they’d look at the “pot” and see there’s more than enough in there for the closing and be satisfied with that.

Had I known this “rule” I would have said the extra money went to pay for taxes and home improvements. Because I DID spend that much on those things since getting the loan. And it all went in and out of the same account. It’s only ME that views it as different money.

[clairebear]

So the lender wants you to come up with different funds to pay closing costs? Which it sounds like you don't have? The situtation is so frustrating. I'm a realtor and do appraisal work as well. It would be almost impossible to close that quickly with a new lender. Please loop your realtor into the situation and see what they'd like for you to do. Most likely you will need to get with a new lender who can close quickly and then push closing if possible. You probably won't be able to use the same appraisal either. Most lenders won't. But honestly the inspection for an appraisal is typically less than an hour. It's not a big deal for the seller to do again. 

[madringal]

You would likely need the sellers permission to switch lenders at this point. In my experience, every lender will want their own appraisal. My advice would be to escalate to your LO's manager.

[Susie]

When we bought in May we thought about switching with 2 weeks to go, but didn't because we wanted to close on time and staying the course seemed to be the best/only way to do that.  Our reason for considering a start-over was that our appraisal came in low, and our lender wouldn't let us update or do a new appraisal to include more recent sales, so I was obviously not looking into whether a bank would do it without a new appraisal.  Sometimes you can get a lender to waive appraisal entirely with 20%+ down and excellent credit (we got that on a 2019 refi on our last house) but I haven't heard of lenders that will use another lender's appraisal.  Good luck, I think escalating with your current lender is your best bet at this point.  

Also, remember that I'm sure your sellers want the deal to close as much as you do, so if you have to "bug" them for something, do it.  Get it done!

[jlt19]

madringal, Susie, I did reach out to my loan processor's manager via phone. I explained to her that I put in the letter of explanation on 7/15/21 tried to follow up a few times and finally on 7/26/21 found out that underwriting wasn't letting my unsecured loan be the source of the down payment. Normally, I'd agree. But I took out that loan in DECEMBER. And there's been over $45k that has come in and out of that account since.

I feel like they should have to use a FIFO basis for the funds or something. Plus, there's $48k in the account. I only transferred in $30k from the loan in December, so are they going to let me use the other $18k in there? The underwriters have not asked for any other bank statements than the past two months I provided, so they won't even let me argue my case it seems.

FINALLY I got an email yesterday afternoon from the loan processor that they talked to underwriting and they still won't let me use the money, so I could borrow it from a 401k, IRA or a family member (which is laughable b/c they would have to KNOW I would just pay that person back!). So I asked for a fair estimate of how much I can use from that savings account (which isn't even where the loan was deposited in to) so I know how much I have to source from other places.

I don't have enough in my 401k b/c I only started it a year ago and DH's doesn't allow loans. I think I'm going to sell our bond MF's in our IRA's since they've grown the least out of everything and at least it won't be super $$ to re-buy. But now i have to figure out how to do a rollover I guess b/c I don't want to miss out on the regular contribution for the year.

UGH this is so irritating. I wish I could talk to the underwriters and THEIR managers.

[puppylove64]

This is not typically good advice, but you can cash out a retirement account and then put it back in within 60(I think) days and not pay taxes on it. It is essentially an indirect rollover. You tell the retirement account you are rolling it over, you get the check made out to you, you then have 60 days to deposit it into another or back into the original retirement account. It is a tax free rollover, but you can do whatever with the funds in those 60 days.

[jlt19]

puppylove64, I've read about this option but I want to be sure I'm not shooting myself in the foot on this before I do it (and I may not even have to b/c I've pleaded enough that underwriting is going to look at my "updated" letter of explanation and my bank statements since December to see if they agree enough has gone in/out of the accounts to determine that the money in there today is not the same money deposited in December).

Anyway, my IRA is at Vanguard and I wouldn't mind rolling it over to Fidelity b/c that's where my brokerage account, 401k, and HSA are. So, yesterday I was putting in that I wanted to w/d 100% of each fund and then it asked about withholding for taxes. I had the option to say no, and I am fully aware that it'll get reported to the IRS regardless, but if I was to deposit it all to Fidelity the second week of August, they'd be notified of that too, right? So it's all on the up and up?

I could always just take out what I need, which wouldn't be taxable anyway b/c it's from contributions, but I'm afraid if Vanguard sees it coming back in, they'll treat it like a 2021 contribution and NOT a rollover, b/c it's the same money/account? And then I'm stuck with the remaining. I could rollover into Fidelity, but then I have two IRA's and would have to wait until next year before combining them.

I guess my biggest concern is, if I don't take out the full amount, is it still considered a roll over? And if I do, am I really not going to get hit with a big tax bill since I didn't have it directly transferred to Fidelity? That's so scary to think about even though I've read the IRS ruling and everything!

[puppylove64]

jlt19 I’m not totally sure all the answers. You should be able to call their rollover department and they can help. You want an indirect rollover with payment made to you. No tax withheld, or you will be out of pocket for the tax withheld when you put the funds back. You must put the exact amount taken out of one fund into the other fund within 60 days. You are only allowed to do this one per calendar year

[ohgillian]

No advice, but this seems super stressful, and I’m sorry it’s happening.

[dr.girlfriend]

Thanks for the update -- I've honestly been worried and checking back!

[scm1011]

Great news! You must be so relieved.

[pumpkin]

So glad to hear it worked out.

[melmel48]

So Happy to hear it all worked out for you!

[maudefindlay]

Hope the rest is smooth sailing.

[sadlebred]

Great news!

[sparkythelawyer]

I remember when I bought my house that I referred to dealing with my lender (Eff you, JP Morgan) as my cardio. For months.

The point where they personally called the Vice President of Human Resources for my company to discuss my company's approach (not untraditional by any means) to bonuses was the point where I lit into them.

And then my main person (who was pretty much in my corner) went on a honeymoon right before my closing, and her replacement thought I was full of shit until she started actually looking at things and then finally got me closed.

In short, housebuying is horrible and I'll keep my fingers crossed for you.

[jlt19]

sparkythelawyer, OMG! That is insane! Like, I understand they have to get into your finances, but to get so overly personal just seems like overkill. I think some of it is the power they yield.

3 more days!