Required by mortgage broker to write "payment shock" letter- how do I go about this?

Question

We are in the process of getting pre-approved to buy a house with an FHA loan. I was told by the mortgage broker that I need to write a "payment shock" letter. While I understand the concept of payment shock, I'm not quite sure what is expected of me in regard to the letter. Does anyone have any knowledge on this? Thank you!

Answer 1

Can you provide details on what "payment shock" is?

Answer 2

I agree with loan girl here.  It really depends on who the broker is using.  Some lenders or broker sponsors want your first born, they name you plan to use, etc.  Unfortunately, it's where lender underwriting is going, they are crossing all t's and dotting every i, but unless your dti ratios are close to boarder acceptance, your payment increase is not that large, so I see why your miffed.  By bigger concern is that your broker should be either writing this for you, letting you review it and have you sign it, or coach you on how to do this.  to me, this is unacceptible, if you were a client of mine, I would at least explain this to you and offer to either write it or coach you through it.  The broker can call the underwriter and see exactly what they want and work with you to achieve it.  I hope this broker has your best interests in mind here, good luck and feel free to ask me a question

Answer 3

Basically, your letter needs to state why you can afford a payment more than 100% of what you are currently paying.  Did you have an increase in income?  Were you living rentfree with family and are now striking our on your own? Your mortgage broker should be coaching you on this, it is part of his/her responsibility.

below:  payment shock is when your new mortgage payment is more than double of what you are paying now.