Kyle’s story – You told me to get married and now I don’t qualify?
Kyle was just out of the Naval Academy, young, smart, ready to take on the world. He’d met Jennifer there and they were engaged. Together they moved to San Diego for his initial orders.
Those initial orders were short. Kyle had new orders in 4 months to go to supply school for a year in Georgia. After those, he’d return to San Diego.
Jennifer was going to stay in San Diego to work on her degree.
They planned buy a house for her to live in.
They planned to get married in the church she grew up in once he returned.
Welcome to military life – right?
Act 2, the plan starts to unravel.
Kyle was pre-approved by the bank he’d gotten his Ensign loan from. They seemed so easy. They focused on the military. What could be better?
The seller took his offer. School had started for Jennifer. They were supposed to close in a week.
But.. Suddenly there was a ‘problem’.
The lender had asked for Kyle’s orders weeks earlier. However, they just now were saying he couldn’t use his VA because it wasn’t going to be his primary residence (bad information by the way).
Fortunately, they had a solution. If he and Jenifer were married, then she could certify occupancy as his spouse.
That was on Thursday. Friday morning Kyle and Jennifer were at the courthouse. The marriage certificate was off to the lender. Problem solved?
Act 3: Did anyone bother to check Jenifer’s credit before telling them to get married?
It’s Monday morning. Time to update the loan to include Jennifer so she can certify occupancy.
Yep, you guessed it. She had a bankruptcy 18 months earlier. She had a car payment. As a student she had no income. Ugg, Ugg, Ugg.
Act 4: All bad
Not only does her credit not meet the lenders requirements, but Kyle’s income isn’t enough to qualify with her car payment.
The lender is denying the loan.
Kyle and Jennifer are:
- Not getting their house
- Out their $400 inspection fee
- Out their $450 appraisal fee
- Likely going to lose their $4,000 deposit
- Married earlier than they wanted
- About to be homeless. (They already gave notice to their landlord, and he already has new tenants lined up).
- All of the above
Their lender is going to:
- Cover the costs of the appraisal and inspection
- Reimburse their deposit if it’s lost
- Put them up in a 5 star hotel until they find a new place
- Help them undo their justice of the peace marriage so they can get married for real in the church they wanted
- None of the above
The lender – the one that specialized in the military – said they were sorry and sent a form letter that their loan was denied. That’s it…
Act 5: From the Ashes – A happy ending
Yes, with our help, they got their house.
- There is a fine print rule that you can sometimes do a VA deal 1-2 years after a Bankruptcy. That rule is very hard to meet, most lenders don’t know it and/or won’t offer it. We were able to argue how Jennifer did meet those rules.
- There are different rules on how much income you need to qualify. We were able to push Kyle’s income all the way to the limit to qualify him with Jenifer’s car loan
- VA appraisals transfer lenders, so we just moved that over to us. The deal did close a couple days late, but the seller was cooperative once they knew the path forward was solid.
They are still married
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Information accurate as of publication date; the views, articles, postings and other information listed in this section are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation. The material in this section is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.
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