Pennsylvania-Philadelphia

House update

Soo... a lot has happened. The seller accepted our bid and the 2nd bid shortly after he did that last Wed. a 3rd bid for the full asking price was placed. FI had gotten preapproved for a conventional loan based on his last year's income. This year's is less because he's not on commission anymore and FI also went by the number on his contract which included his health benefits. So because the back ratio (how much you take home vs. how much you pay for your house) is too high the bank won't approve him. So now we have to go through an FHA. Even though it might take longer, the people we've been talking to says we can still close before the wedding.

We were afraid that the seller would back out from the contract since we now have to go to FHA because the only reason why he went with us over the 2nd bid is because we're putting 20% down and were going through a conventional loan. We find out on Monday that he's going to stick with us. Our realtor told him that we were young buyers and we made a mistake but we really want this house and we have family in the neighbor, which made the seller stay with us.

We also found out that the third bidder has been calling everyday and even offered more than the asking price. We had to make a change in the contract though since we're doing an FHA loan the seller does not want to be responsible for any of the fixes that the house needs. So we are hoping the inspector won't give us a big list of stuff to fix because we'll have to pay for it. The inspector is coming Friday.

Re: House update

  • edited December 2011
    Make sure you still give yourself an out after the home inspection - don't give away your right to walk away, keep the contingency in place even if you acknowledge you won't ask for repairs.  The contingency is there to give you an out if the repairs are a lot.   If the house has more issues than you bargained for, make sure you won't lose your deposit if you walk after inspection is done.

    Sorry to hear about this - but at least things are still looking positive for you and they are sticking with you!  

    :)

  • edited December 2011
    good luck.

    Not to be a debbie downer but don't get your hopes up to settle before the wedding. EVERY person I know who has a FHA loan has had there settlement pushed back numerous times. The minimum 2 months.
  • edited December 2011
    Eh, I've had people settle with FHA in about 40 days on average.   I had one 2 weeks ago that was scheduled for 30 days, and I was hesistant but the bank kept promising everything was fine and he was good to settle... The day before settlement of course they magically needed another week.   The lender I use most often always asks me to schedule things 45 days out for FHA, just because that tends to be the average for him too. 
  • edited December 2011
    Also, fyi - if you need to settle while youre on your honeymoon, you can always give your Realtor (or family member) power of attorney to sign on behalf of you.   So technically you don't NEED to be there.  No need to panic if it needs an extension.
  • edited December 2011
    that 40 days pushes it past the wedding. You obviously know more then me though, I just know from stories! :)
  • Northstar1808Northstar1808 member
    Fifth Anniversary 1000 Comments
    edited December 2011
    Yeah we're looking into getting a prenup so that my student loan debt doesn't affect FI since he has no debt.

    Kim - do you think the FHA loan will be approved faster since FI barely missed a conventional by $3,000?
  • edited December 2011
    It can be done in 30... just doesnt always happen often.   However if their lender is very good and on top of things, gets the appraisal back right away and the final approval at least a week before settlement... they should be fine.   My last sale was def on track to close in 30, but the appraisal came back low and they had to reappraise and that took some extra time unfortunately.
  • edited December 2011
    Best of luck to you guys!!! I cant wait til we can sell our place and get a stand alone house. :)  I want to decorate so bad
    Photobucket
  • edited December 2011
    Northstar (I always forget your real name, sorry!!) - 
    It's not as much the qualifying part of the loan that holds it up.  In my experience one of the biggest things tends to be the appraisal, so hopefully the bank has already ordered it, done it and get it back ASAP.  If it appraises for full price, you are good from that front at least.   Then you'd just want to make sure he gets all the needed paperwork in on time to the mortgage co so they can get your final approval back ASAP as well.  A lot of times things that delay the final approval tend to be someone forgetting to hand in something, such as a paystub that was requested, and everyone waiting around on it.  So the sooner your FI turns in everything and the file is complete, the better.  It doesnt help that we've got a holiday on Monday so banks will be closed :/   Has FI already submitted his application at least with the bank and paid for the appraisal?
  • Northstar1808Northstar1808 member
    Fifth Anniversary 1000 Comments
    edited December 2011
    I'm not sure about the application for the appraisal. I'll have to ask him. What happens if it's appraised for more than the asking price? The asking price was pretty low.

    btw my real name is Diana :)
  • edited December 2011
    Oh I knew that.. Diana!   The appraisal can be done before he starts his official mortgage application as long as he gives them a check for the appraisal.  So it doesnt neccesarily need to be done the same time as the formal application.  But either way, it should be ordered asap.   If it over-appraises, good for you - that rarely happens, so if it does you know you got yourself a good deal!   It won't effect anything though.. It only hurts things when it UNDER appraises, because the bank will not lend on the sales price amount, they will reduce it to the appraised amount meaning you need to come up with more money out of pocket.  If it was priced low though, you should be fine.  It's normally a problem for overpriced homes.
  • Northstar1808Northstar1808 member
    Fifth Anniversary 1000 Comments
    edited December 2011
    ooh ok... that's really good to know. Thanks so much Kim!
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