Home Buying Question
Ok so I'm a new graduate nursing student and have accepted a position at a hospital in metropolitan area. I started looking at houses in the area and decided to use a lender that my real estate agent suggested. She asked me what I thought my annual earnings would be and ran a credit check and told me I was pre-approved and could make an offer on a home. So I made an offer on a home in the area. This was in October and we decided to make the closing in December since I was graduating school then. Anyway, since that time my lender has harassed me for all kinds of documentation and so on and now has said that she is having trouble getting me approved for a loan and I even had to arrange for 20% down after she told me initially I'd only have to put 4-5% down, which has put me in a financial bind. I am still currently trying to get the house but we had to push back the closing date and the seller is getting upset and has already deleted the home warranty from the contract they initially agreed upon. My question is this? If I say forget the whole thing and back out now, am I obligated to pay the lender for their time? I feel like this mess is because of their advice to begin with.
Thanks!
Comentarios (30)
sushipup1
hace 7 añosIn order to get a home loan, the lender does require a ton of documentation. When you first get pre-approved, it means very little. but when you get a contract on a house, you have to provide the lender with everything, as well as a copy of the contract. Then the actaul loan can get processed with a locked-in interest rate. Rates have gone up a fair amount in the last two months. If you have not been cooperative, then your interest rate lock has dissolved and you will have to qualify all over again.
PROAnglophilia
hace 7 añosIt sounds like this would be a poor financial decision for you - you really just can't afford it.
One thing I learned last year in re-financing my house of 32 years (having re-financed 3 times before!), is that now "mortgage officers" at banks are just mortgage salesmen. They want to sign you up for a mortgage and they will make lots of promises in order to get you. They no longer have ANY authority to approve a mortgagee, and if the bank is one of the new ones with a headquarters in a distant state (and many, many are these days), there will be bean counters there who don't know you, don't know your neighborhood or the house. It is SO different from when ones relationship with a bank came into play and the mortgage officer had the authority to approve. The banks require tons of documents (the federal gov't started this after the house mess when people who worked part-time at fast food restaurants were being approved to purchase $300,000 houses!). And they may well ask for them over and over again. Sometimes, it's because the local guy never sent them or lost them. I was refinancing at a bank where I had a current 15 yr fixed rate mortgage and where I had had accounts for 32 years since moving here. That didn't matter.
Save some more money and then go into a possible buy with a far clearer vision of what's ahead. I know - interest rates are going up - but you do not want to be house poor.
loto1953
hace 7 añosYou shouldn't owe your lender anything other than possibly the cost of an appraisal if it has been completed and he could try to stick you with a credit check fee.
I have sold homes to several physicians and they use a program that is available to only those in the medical field...low money down and low interest rates. Don't know if it is available to those in the nursing field but worth a try.
Stan B
hace 7 añosDid your offer on the house have a financing contingency? If so hopefully you can get your earnest money back easily.
freeoscar
hace 7 añoswe just closed on a post-renovation re-fi, using the same bank which held the existing mortgage. I wouldn't say they needed anything out of the ordinary - tax returns, w-2s, bank account statements, credit reports, employment verification, homeowners insurance verification for the upgraded amount. Nothing that a lender shouldn't need. The process did take longer than they had told us, but I can reasonably attribute that to them being inundated to get a lot of applications through before the pre-election rate locks expired.
As Ioto suggests, many, especially more local banks, offer mortgages targeted towards local public service workers. Not only are they a good rate, but as a local bank they tend to be easier to work with.
kudzu9
hace 7 añosÚltima modificación: hace 7 añosThere are plenty of legitimate financing providers online who might be more favorable to you, and could give you an answer very quickly. Don't give up until you try this. It might open up some options, and shouldn't cost anything to explore.
Here is what seems to be a pretty balanced article on one such loan provider that may help educate you on this approach and some of the things to be aware of if you want to consider going this way: Rocket Mortgage
homechef59
hace 7 añosYou are under a lot of stress. You have a new career, a new life. You really don't know what your take home pay and expenses will total. I'd recommend renting for a year. Save some money, reassess your situation. You can get out of the deal using the lack of financing as your reason. You will get earnest money deposit back. But, you will have to pay the appraisal fee, if performed, the application fee and the credit check. But, it's cheap if you aren't ready to be a homeowner. It doesn't sound as if you are quite ready for the process. It's a hard process for even us experts. Lots of pitfalls and frustrating moments that make no sense. Maybe you should wait.
PROSingle Girl's DIY
hace 7 añosÚltima modificación: hace 7 añosNo, you absolutely do not have to pay the lender for her time. Deals fall through all the time.
I used to be a real estate agent, and learned a lot that I wish I had known before I bought my own first house. I know it's emotional. I'm sure you were excited to buy a home, but let me share a little agent advice, "There will always be another house."
When I bought my own home, I was in tears in my lender's office, because I really couldn't afford the home I was trying to buy. He did some questionable things to make the deal work that made my financial life very stressful for the next few years.
Please do yourself a favor, step back and let this deal go. Re-evaluate your finances, shop around with several lenders, and my biggest piece of advice, search for a "First Time Home Buyer" class in your area. There is so much great information that you don't even know you don't know. Plus, there may be downpayment assistance programs, or a mortgage tax credit you could qualify for. Good luck!
ncrealestateguy
hace 7 añosJennifer, the lender did not make your life stressful for years. Your decision to purchase a home beyond your means made your life stressful. All the lender did was to find you financing after you tearfully asked him to do so.
Otherwise, good advice.
kudzu9
hace 7 añosÚltima modificación: hace 7 añosThis is clearly a stressful situation, but it's not clear to me that the OP should be chastised about his choices or that he is trying to buy a house he can't afford. I don't think there is enough info to conclude that the OP is being injudicious.
I can remember how stressful it was for me buying my first house and being at the mercy of the loan officer controlling the opaque loan process. The OP came here asking for advice, and I hope he is not unnecessarily discouraged.
- PRO
Single Girl's DIY
hace 7 añosncrealestateguy, True, it was my decision. I just wish that my lender had told a completely inexperienced home buyer such as myself that I couldn't really afford that mortgage. Or that I had other options. The tears weren't me begging him to make it work. It was me wondering how it could. Now I do my best to help other people avoid those newbie mistakes I wish I hadn't made.
Linda
hace 7 añosI would be surprised if you get thru underwriting. A new graduate and a new job is typically not qualified to get a mortgage. Usually, they want to see you in a position for at least a year. You wont owe the bank any money for anything they have done, but you will lose whatever money you gave them for application etc. Also, depending on what state you are in, your earnest money may be in jeopardy. I would check with your atty or agent about that. Rent for awhile, a new job, new house and new area is way too much to do at the same time.
Jpolk34 (New Orleans, LA, Zone 9B)
Autor originalhace 7 añosÚltima modificación: hace 7 añosThank you all for the suggestions. The main issue is that I haven't started my job and the hold up is trying to get the loan approved from an offer letter alone. As far as financials go, I'm ok now. I recently sold my current home that I owned free and clear and plan to apply most of that toward the cost of the home and should have a reasonable note after that. Worst case scenario, the owner of the home I've got a contract on says he will rent the home to me until I can produce a pay stub for the underwriter to approve my loan. That is just if I don't get my loan approved with the offer letter.
ncrealestateguy
hace 7 añosI don't understand why this late in the game that you still don't know if the lender is going to approve your financing. It should be a matter of a phone call at this point. Also, if you are using cash from a previous sale to cover most of the new loan, then what is all the hub - bub about?
What Linda says sounds about right too.
Something about this entire scenario does not compute.
Jpolk34 (New Orleans, LA, Zone 9B)
Autor originalhace 7 añosI'm no expert on these matters obviously, but I've thought the fact that I have good collateral should make this process a lot smoother, but like Linda mentioned I think the fact that I have not started the job yet and its a new hiring, etc. has presented issues with getting the loan processed, but it looks like we are about to get everything finalized.
Linda
hace 7 añosNCRealestateguy, unfortunately, in my area, we get pre approvals, but getting an acutal mortgage committment, doesnt come until about 2 weeks before you close. (2.5 months after the offer), ITS TERRIBLE!!!
ncrealestateguy
hace 7 añosI understand that, but once the OP has gotten to the underwriting stage, which she has been for a long time, (The closing was scheduled for December) the final decision should be fairly quick. Something still does not compute as in the OPs first post she says she was going to put down 4 percent, then she says she was told that she would have to put down 20% and then later, she says that she has cash from selling her previous home to cover most of this new loan.
It has been my experience that no lender will finance with only an offer letter in hand. Even a loan officer, as opposed to the underwriter, should have seen this as a red flag.
Jpolk34 (New Orleans, LA, Zone 9B)
Autor originalhace 7 añosI'm a he actually. I sold my home December 30th and back when I made this post I didn't anticipate the use of these funds since the closing date was scheduled for December 19th originally.
Jpolk34 (New Orleans, LA, Zone 9B)
Autor originalhace 7 añosYes, I closed on the home and I'm moving in officially Friday.
Jpolk34 (New Orleans, LA, Zone 9B) agradeció a rob333 (zone 7b)- Jpolk34 (New Orleans, LA, Zone 9B) agradeció a kudzu9
Jpolk34 (New Orleans, LA, Zone 9B) agradeció a cpartistncrealestateguy
hace 7 añosIt would be helpful if you explained what it was that finally got the underwriter to approve you... did you use funds from your home sale to increase your down payment, did the underwriter decide to use your work's Letter Of Intent after all?
Jpolk34 (New Orleans, LA, Zone 9B)
Autor originalhace 7 añosYes the underwriter approved the letter of intent after the hospital revised the letter to say what my estimated annual income would be.
ncrealestateguy
hace 7 añosThank you for explaining... it will surely help others in the same situation.
Amy Barrett
hace 7 añosI am considering buying my first home and I really appreciate all the info in this thread!
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kudzu9