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USDA Deniel

I was pre-approved for USDA loan. Bid on a house it was accepted. Paid the earnest money,Home Inspection, Termite Inspection and appraisal. Then my lender tells me 3 weeks before we close that USDA has denied my loan. Give me the reason of "payment shock". Anyone with Advice? by from Cary, North Carolina. May 25th 2016 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,727 contributions

Payment shock is when you currently have little or now housing payment, but now that you are buying a home, your new housing payment is significantly higher. Example: you currently live parents and pay $0.00, but the new home will cost you $1,200 per month.. they consider this "Payment Shock".. in this example, if you could show that you have saved consistently $700, $800, or even $1000 per month over the last 6 to 12 months, then the lender would say that there are positive compensating factors and they would ignore the payment shock.. but if in this same scenario, you have little or no savings, then they will most certainly turn you down because of this.. You might consider FHA or Conventional.. although the underwriter still might think you have payment shock, if you submit a personal monthly income and expense budget where the net result is you have enough left over to put into savings each month, then you might get approved that way.. How any of this will apply to your specific scenario is anyone guess.. you did not provide enough info, but in general.. this is what the lender is referring to.. I hope this helped,.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 NMLS# 226347

May 25th 2016
Kevin Stormer (
#80 ranked lender in North Carolina - 6 contributions

Hello,Payment Shock alone shouldn't be the determining factor to your loan being denied. There are other compensating factors that can be introduced by way of "Letter of Explanation" that can offset the effect of Payment Shock on your loan notes. My questions would be: Do you have recent rental payment history? If so, how much of an increase from what you paid in rent vs. your projected house payment? Want to talk about saving this deal? Email me at:

May 25th 2016
Jason Bennett (jbennett)
#103 ranked lender in Pennsylvania - 70 contributions

Were you Pre-approved or prequalified?? big difference...Pre-approval is set before an underwriter with all of your docs in place...Movement mortgage does this for you upfront in 6 hrs before you even write a contract, so you know before you sign what you can do, regardless of program. If home is in Pa. I can help, or if another state I can direct you to someone. email:

May 26th 2016
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