This put up might include affiliate hyperlinks. Click on right here to learn my full disclosure.
Navy Federal Credit score Union is a good monetary establishment. They provide banking providers for navy and members of the family of those that both are actively serving or have served our Nation. You may be part of Navy Federal even in the event you or your partner should not navy, so when my husband and I discovered that they supplied a no cash down mortgage with no PMI, we had been all about it!
That was till a couple of month in the past.
Our scenario is exclusive. As a result of I’m a former Realtor® and banker, serving within the monetary providers trade for over 15 years, and my husband has additionally been employed in the identical trade for the previous 17 years, we all know our approach round mortgages and loans on the whole.
I need to share a bit of backstory, after which I’ll share why we dumped Navy Federal Credit score Union and the way our new mortgage lender gave us $70,000 larger mortgage approval (with no modifications in revenue).
We labored our butts off in 2020 to repay an astronomical quantity of debt. We bought our residence in Illinois, moved all the way down to Florida as a result of, let’s face it…politically and socially, Illinois is an absolute mess. There was nothing there for us.
So we buckled down, acquired our sh*t collectively, and began working onerous in the direction of paying off our debt. We listed our home on the market March 6, 2020. Keep in mind that month? That was a enjoyable month ~ mentioned nobody ever.
We labored our tails off to economize. We bought our boat. We skipped our annual summer season trip as a result of (you guessed it)…we stay in Florida now!
We additionally refinanced the remaining bank card debt into an unsecured mortgage with LightStream, a division of SunTrust. Finest determination ever! I do know Dave Ramsey isn’t a fan of debt consolidation, but it surely severely made our lives a lot simpler, and for the primary time EVER, we now have not used the bank cards once more!
I disagree with Dave on a few of his recommendation, as a result of I don’t consider that it’s all good recommendation, however in the event you love him, and working the child steps is working for you then, by all means, preserve going!
As a result of I’m self employed and have plenty of write offs, we thought it could be smarter to maintain me off the mortgage (despite the fact that I’ve an 800 credit score rating) as a result of my husband has an equally stellar rating with 100% on time fee historical past.
His debt to revenue ratio is presently at 8% (extremely low) after paying off all the debt besides his pickup fee.
So we thought after we utilized for the mortgage with Navy Federal Credit score Union, we’d be set for a good preapproval. Take into account, I do know my numbers (and so does my hubby).
Navy Fed manually underwrites all of its mortgages, and we now have compensating elements that ought to put us in an ideal place to purchase.
There was only one downside.
Navy Federal Credit score Union Elevating Curiosity Charges on Mortgages
Once we first had been preapproved with Navy Federal Credit score Union, we had been accepted for $315,000 for the no cash down, no PMI mortgage, additionally known as Homebuyers’ Alternative.
This was positively a superb quantity to work with in our market right here in NW Florida as property values are sky-rocketing.
The rate of interest for the house mortgage was 3.875% for a 30 12 months mounted time period. Not too unhealthy, however not one of the best. Nevertheless, we had been pleased we solely needed to come out of pocket with closing prices.
Right here’s the place our story will get sophisticated.
My husband was commuting to a job, and after Hurricane Sally destroyed Pensacola Bay Bridge, his commute went from 35 minutes one method to 1.5 hours a technique. After a number of head on collisions on the one different bridge to our little island, we determined sufficient was sufficient.
My husband was supplied a place at his former employer incomes much less base pay however with a assured bonus construction and the potential to earn greater than he was in his present position. So he accepted.
Altering Jobs within the Center of Shopping for a Home
Once you change jobs in the course of shopping for a home, you run the chance of it messing up your mortgage. We knew that, and for us, the reward was better than the chance. We had been going to discover a approach to purchase a house AND enhance his high quality of life.
Should you swap jobs however stay in the identical discipline, more often than not, you should utilize your bonus revenue and commissions as revenue to assist qualify for extra.
Navy Fed mentioned no to utilizing the bonus revenue (despite the fact that there’s a assure in writing from his employer).
Earlier I discussed price will increase. As a result of we couldn’t use the bonus revenue and my husband took a slight pay minimize, it decreased our preapproval quantity from $315,000 all the way down to $280,000.
We weren’t thrilled, as a result of we knew it could be tough to purchase a house in our space to comfortably match our household of 5 with two mother and father working from residence, however after we realized in regards to the price improve, we had been shocked.
The speed went from 3.875% as much as 4.25%, and so they lowered our preapproval quantity all the way down to $270,000. By now, we had been panicking.
Once more, we all know our numbers. One thing wasn’t proper about his debt to revenue ratio on the subject of this preapproval quantity. So I requested the mortgage officer how a lot Navy Fed was calculating for taxes and insurance coverage, and it was HIGH (a lot larger than what we had been ).
Once you’re calculating residence affordability, you possibly can’t go off of averages based mostly on a zipper code (which is what Navy Federal does). You need to have a look at every residence’s property taxes inside your market, whether or not they have homestead exemption, and the way a lot they’ll improve based mostly on a better gross sales value than its present evaluation.
Earlier than I discuss how to determine potential assessed values, I need to share the ultimate straw. As a result of my husband was going again to his former employer after one 12 months with a unique employer, he was capable of get his tenure again.
He labored for this insurance coverage firm for 4 years earlier than we moved to Florida, and since there was only a 12 months distinction, his firm put his rent date as 10/2016 as a substitute of three/2021.
Navy Fed’s large hangup on utilizing his bonus revenue was that he didn’t have 2 years of historical past along with his former employer, so we determined to ask if they may use the bonus revenue. I wasn’t taking place with out a battle!!
So we had underwriting have a look at it in depth, and our mortgage officer got here again just a few days later and mentioned that after underwriting checked out our mortgage, not solely might they not embody his bonus revenue, however our preapproval had been lowered to $250,000, and so they had raised rates of interest AGAIN…now at 4.5%.
I used to be furious. Clearly feeling fully defeated, I began researching different lenders.
Quicken Loans Rocket Mortgage For the Win
I checked out native lenders, however I remembered one of many best transactions I’d ever had as a Realtor® was when one in all my patrons used Quicken Loans to purchase a house.
It was a seamless transaction with wonderful communication, and despite the fact that Realtors® at all times counsel utilizing an area lender, Quicken was on the prime of my listing of lenders to take a look at.
I began a chat with Quicken and was known as by a banker, Daniel, who was assured that he might assist us. I defined our scenario, and he mentioned that utilizing the bonus revenue could be no downside in any respect so long as we might doc it.
Getting a Quicken Loans Preapproval
It took about one hour whole, and we had been capable of obtain a preapproval for an FHA mortgage, requiring 3.5% down, at an rate of interest of two.875%. The preapproval quantity? $320,000! A standard mortgage would have required at the very least 5% down and the rate of interest was 3.5%.
There have been questions, reminiscent of “Did we now have a mortgage in forbearance throughout Covid?”.
Once we listed our residence on the market on March 6, 2020, in Illinois, we had no concept that the fool governor was going to close your complete state down for months.
Individuals simply weren’t snug shopping for a house from a digital stroll by way of. So our residence sat available on the market for a number of months, and as a substitute of paying for 3 houses (my husband’s short-term rental, our residence in Illinois, and rental in Florida), we put it in forbearance.
Cash was tight, and this was earlier than we had paid off our debt.
Can I Promote My Home Whereas in Forbearance?
Daniel requested us if we bought our residence whereas it was in forbearance, and the reply was YES. We by no means missed a fee. On the closing, we needed to pay the accrued curiosity from these months of skipped funds, so we netted lower than we might have preferred, however we had been by no means late on a fee.
Below the CARES Act, there needs to be no damaging impression to 1’s credit score report because of forbearance. I requested Daniel if this was going to mess up our mortgage, and he assured me that it could not, however it could require extra paperwork.
I merely needed to add the paperwork from my earlier lender stating that it was Covid forbearance and never as a result of some other monetary hardship.
Shopping for a Dwelling with Quicken Loans aka Rocket Mortgage
You could be questioning what the method is like with Quicken Loans? I’ll share my timeline for purchasing a house with Quicken Loans.
- April 6 – Wrote a suggestion on a property.
- April 7 – Executed Contract (Supply Accepted).
- April 10 – Determined to Again out of Contract on That Property (It simply wasn’t proper for us)
- April 11 – Communicated with Realtor about an Upcoming Itemizing that was PERFECT for us!
- April 12 – Itemizing went LIVE and we had been the primary to see it! Made an Supply. Spoke with Lender to Replace PreApproval Quantity.
- April 13 – Executed Contract with a Counter Supply from Vendor. Known as Insurance coverage Firms to Begin Quotes
- April 14 – Termite Inspection
- April 15 – Entire Dwelling, Wind Mitigation, 4 Level Inspection – Emailed Studies to Insurance coverage Brokers
- April 17 – Conditional Approval from Quicken Loans! (wanted to add some paperwork)
- April 23 – FHA appraisal is Scheduled for this Date!
- April 25 – Septic inspection
- Could 26 – Anticipated Closing Date (sooner if potential)
Working with Quicken Loans has been a breeze, and I’m so grateful that we gave them an opportunity! Since we had been quoted the 4.5% rate of interest from Navy Federal Credit score Union, we haven’t heard a single phrase from our mortgage officer. She has no concept that we’re working with one other firm. She simply stopped speaking altogether.
So in the event you’re wanting to buy a house, however you’re feeling discouraged by all the completely different choices, verify with a number of lenders and don’t hand over hope. It’s nonetheless a good time to purchase a house! Charges are nonetheless low relying on who you select, and I extremely advocate Rocket Mortgage with Quicken Loans.
Facet Word: This text isn’t sponsored in any approach, form, or type, though I might LOVE to work with Quicken on future tasks.
Life is a group of recollections and experiences. There are ups and downs. I’m so grateful for God’s grace and am on the journey to a renewed spirit, freed from perfectionism. Perfection Hangover provides the sober fact – no filter.