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I am in the process of purchasing my first home and I receive work back from my loan processor that the underwriter has decline my loan due to child care expenses. Now my martial status is single and my child's father and I are in a relationship and have been for 10 yrs. Since our child was born on 2008 he has paid the child care to the provider with cash in October of last year she stopped excepting cash and now I pay her from my bank account with a check but I am always given the money by him to compensate for it. I have no paper trail between my son's father and I so I can't prove that he now gives me this money for the expense. Is there any way for me to prove this to the underwriter now, do I have any other options? Please help.... I am overwhelmed, confused and frustrated with this.
The person to ask is your loan officer. He/She is the middle man between you and the underwriter and since the loan officer probably doesn't get paid unless your loan closes, they should obviously be trying to help in any way possible. I'm actually surprised that child care expenses are an issue especially if there's no paper trail. If you were talking about child support money that would be a different story because that would go on the loan as income and would need to be verified in which case you'd need to get that money via a check. Just curious but are you getting an FHA loan? If you aren't, you need to check on one. FHA is government insured and can be easier to qualify for, plus you can usually get a loan with only a 3.5% down payment.
I was surprised as well, the loan I am applying for on the home is a VA Vendee loan for a VA foreclosure. I didn't understand why the child care expense was being considered as a long term debt since I really don't need to have my son in child care we just him there to aid in building his social skills and help him to adapt to being around people other than mom, dad and grandparents. Thank you for your suggestion. I will inquire with my loan officer to see if they are confusing this with a child support payment maybe.
Most lenders will accept an affidavit and appropriate documentation (like tax returns that show the dependent claim and bank statements that show a pattern of withdrawals/deposits). If you have already supplied that (unclear) and the sum of your ongoing debts exceeds your income then you are outa luck..
Hi Chet,
We asked if we can provide an affidavit stating that he bears this expense and was told that she will only accept canceled checks showing he paid it or bank statement showing my deposits. Well unknowing this type of information will be needed I never depsosited the money into my account for two reasons, 1. I use it for everyday use so that I won't have to use my account and 2. My bank is not local so I would have to purchase a money order and mail the deposit in. I can show that from Nov. 2008 until Sept. 2009 he was paying the provider himself in cash via the receipts she provided but from Oct. 2009 now I have no way of showing he is the person paying this and not me. I was told that the child care expense is what makes my debts exceed my income and this is the only thing that caused the underwriter to decline.
Hi Poltracker,
There is no child support order, we are in a 10 year relationship and live together and support our child. He is just not on the loan for the house because he was laid off and recently started a business.
Child care expenses are counted in your ratios on VA loans. I'm not sure about FHA loans, since those are done by a different department where I work. If you have a child, and you have child care expenses, they have to be counted.
Did the Loan Officer say this expense put your ratios over guidelines?
Amanda,
Yes the underwriter came back and said it put my ratios over guidelines and I did the calculation also and it does by 8 percent, but technically I don't pay this his father does. We don't have a court ordered child support in place and so there is no proof he pays this it is an agreement between the two of us. We live together in the same house, and split living expenses I provide the health care for our son and he provides child care. I was wondering if a notarized affidavit can be used to show account for this also just as a backup I do have dependent care reimbursement from my employer as a pre-tax deduction should his father ever get into a bind and not be able to the expense. This is the first year I am using this benefit as the checks to the daycare provider comes from my checking account and are no longer paid directly to her by him. The reimbursement is maxed out at 5000 so of the 7200 a year I pay I am reimbursed for 5000 of it.
I am in the process of purchasing my first home and I receive work back from my loan processor that the underwriter has decline my loan due to child care expenses. Now my martial status is single and my child's father and I are in a relationship and have been for 10 yrs. Since our child was born on 2008 he has paid the child care to the provider with cash in October of last year she stopped excepting cash and now I pay her from my bank account with a check but I am always given the money by him to compensate for it. I have no paper trail between my son's father and I so I can't prove that he now gives me this money for the expense. Is there any way for me to prove this to the underwriter now, do I have any other options? Please help.... I am overwhelmed, confused and frustrated with this.
If the baby daddy gives you money by check, have him make photo copies of the checks. If he gives you cash, then you need to give him a RECEIPT for the money so that it can be tracked. I would think that if you wrote out an affidavit that you received the money that a loan company would accept that. After all, an affidavit is a legal document and you could be charged with fraud if you are not telling the truth.
Ask your loan officer.
20yrsinBranson
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