+1 vote
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I received an unsecured loan of  6K in July (not looking to buy a house during this time).

Fell in love with a developing community and signed a contract with the builder at the end of August.

Was given a conditional approval for FHA loan and satisfied conditions so far. Looking to close in December. However the UW is still questioning the funds received from the loan. They haven’t asked for a LOX yet. The account the money was deposited into is my primary account that I will use for the down payment for the house.

I did not get the loan for the house. I make around 70K annually and I would’ve already made more than what I borrowed by the time of closing.

AM I AT RISK OF BEING DENIED FOR THE HOME LOAN??

1 Answer

0 votes
answered by (40.8k points)
You are not going to get denied for your home mortgage. However, they will know about the personal loan because of the credit inquiry. The mortgage underwriter will hit you for the minimum payment due when the $6,000 is maxed out or 5% of the $6,000 which is $300 per month. Therefore, $300 per month or whatever the minimum payment will be will be used by the mortgage underwriter when she re-calculated your debt to income ratio.
commented by
edited
Thank you so much for your response. I’m a little concerned because the UW wants to make sure the money is not being used towards the house. And with all of my money in one single account It’s hard for me to prove it. After the loan was deposited I used my debit card along with e-checks to pay off bills. I was told that the UW may want to deduct that amount from my assets but that would leave me with nothing. I will have the down payment and closing costs in December, but will they reject it coming from my account?
commented by (40.8k points)
If the money is not there, it will be deducted from your assets.
commented by
I’m afraid I don’t understand. The down payment and closing costs will be in my account because I’ve been saving money from my paychecks. Are you saying they won’t accept my payment?
commented by (40.8k points)
You can use the money any way you want because the underwriter will hit you for the minimum monthly payments. If you have the down payment and closing costs in your account, those funds are considered verified funds. You can have more money in your account as long as the money is sourced. The $6,000 you got is sourced funds since you got a personal loan. So there is nothing to worry about. You need to talk about this with your loan officer since he is knows your financial and credit information. I am just going by what you are telling me.
commented by
Okay now I understand. My LO is currently trying to explain the situation to the UW hoping he accepts his logic regarding the funds. My DTI is 18% and that includes the monthly payments for the personal loan. The UW just wants to verify that the personal is not going to be used towards the house since it isn’t secured. Thank you for your insight. I’m hoping all works out in December.
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