The Non-Close

Standard

Last week I was under a mistaken impression that I was about to close a mortgage loan on a new town home. The close date was set and the loaning bank had been selected through a logical process that included the fact that the bank was the mortgage holder on my “old” house.

However, as the loan package made its way through multiple levels of review, there were continuing questions on every “unusual” transaction.  Now, when your husband has just died , you are establishing retirement income,  you are applying for Social Security, insurance is coming in, you are changing insurance vendors, and your daughter is changing colleges, there are OFTEN unusual transactions.

But the big stumbling block became the fact that my debt to income ratio was too high.

I still have my family home and its mortgage (even though it has been paid down to less than a third of its value). There is the mortgage on the new town home, and I bought a new car (which I borrowed money to finance to get some credit in my name alone).  Therefore the total of those three payments is too high for the regular income I have from retirement and social security.

The “silliness” here is that there are also significant investment holdings which could totally pay ALL of the above loans. 

My frustration with this process was that there are MULTIPLE levels of review, nothing was changing through the process, and that ratio was imminently obvious from the first submission. I was not advised of the cancelation of the close until I had already traveled the five hours to the close location.

The town I am moving to is a small town – the largest part of the attraction after fighting rush hour traffic for many years.  Along with the smaller town is the establishment of personal relationships. The owner of the real estate firm acting as the agent for my new town home knew one of the loan officers at a regional bank, and suggested that I go talk to him. I had brought the loan package I had submitted to the larger banks with me after learning of this relationship.  So, after the introduction, and an interview related to my background and future plans, I left the three inch document stack with him.  A day later, after providing a few more pieces of information, he had run the numbers though his software, and said that he did not see a problem.  I have continued to say that if I need to pay off the car loan to improve the debt to income ratio, I will do so.

I left his office, and started back down the mountain.  Prior to leaving the new banker, I told the loan officer that I was now putting all my eggs in his basket.  From the car, I sent an email cancelling my application for mortgage loan from the prior entity (interestingly, I have received no acknowledgement of that email).  Now it will take another three weeks for this new package to make its way through the system. I have rented the townhome, and have time to plan the location of furniture prior to close. But I sure wish I had the loan in place. On to preparing the old home for sale.

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