require that I put down only 3% down. The bank also informed me that I could take out an additional loan, fixed rate. This additional loan would help with all closing costs as well as some of the down payment because I want to put down 5%.
My initial preapproval was for 5 % down requirement for a purchase price of about 340K. When I place the offer on a home I loved, the offer was 90K lower than what I was approved for. However, the listing price was also much lower. My agent suggested that acquire another preapproval to the seller less than what I was preapproved for. The new preapproval should show that I am approved for the offer price. When the bank put the preapproval request in, it was at 20% down and my bank broker told me not to panic. When she put my application together, it still showed that it was 20% down loan. Now I’m screwed! The loan that I can get "to help pay with closing costs" does not even cover all of the 15%. It does not help me. Can this be changed?
The contract states that I’m only putting 5% down. So with regards to the contract, I’m not in breach of anything. However, shouldn’t the loan also state that I’m putting 5% down too. Since we have not got to closing, is it possible to change things without having to go through the underwriting process again. The broker I’ve been working with is on vacation but should have returned. In her absence, I’ve been dealing with her colleague who has answered my questions to the best of her knowledge but I’m still confused. Because all along, I’ve been going on the notion that I was only required to put 5% down. Also, naive me thought the larger loan would pay for part of the downpayment and closing costs and the balance would go to me for any cosmetic work I wanted or needed to do on the house that would not credited by the seller. The plot thickens.
Also, going to another lender may be an option to consider but another lender will hit my credti history and further reduce my score.
Part of what you did was right. It’s best to match the preapproval letter to the offering price. You don’t want the preapproval to say $400,000 wen you are offering $340,000. Not good.
Yes, the fnancing can be changed at any time up to financing. The problem is that if the seller thinks you are putting down 20%, you need to inform them that you are not. You are chaning the terms of the contract (unless the contract does not specify how much you need to put as a down payment – unlikely)
The good part is that if you can’t come up with 15% or 20% down, you don’t have to buy the house. No one can force you to come up with the cash. This is called a financing contingency. It is contingent on you getting a loan at 3% or 5% down, not 15% or 20%.
1. Get the preapproval letter changed to 3% down
2. Make sure the agent informs the seller (in writing)
3. Negotiate the best rate you can with the lender. One fixed rate loan is generally better, but I don’t know what they are offering you. Sometimes 2 are better if you can pay one off within a year or two.
I would find another mortgage person.
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unfortunately once your loan is put in they cant do a redo. in otherwords they goet one shot at doing the loan. you cant in most cases put they deal in front of an underwritter for the bank then take it back and chagge things. look for anouthr bank if you have too!
References :
http://directlendingplanet.com/index.html
Part of what you did was right. It’s best to match the preapproval letter to the offering price. You don’t want the preapproval to say $400,000 wen you are offering $340,000. Not good.
Yes, the fnancing can be changed at any time up to financing. The problem is that if the seller thinks you are putting down 20%, you need to inform them that you are not. You are chaning the terms of the contract (unless the contract does not specify how much you need to put as a down payment – unlikely)
The good part is that if you can’t come up with 15% or 20% down, you don’t have to buy the house. No one can force you to come up with the cash. This is called a financing contingency. It is contingent on you getting a loan at 3% or 5% down, not 15% or 20%.
1. Get the preapproval letter changed to 3% down
2. Make sure the agent informs the seller (in writing)
3. Negotiate the best rate you can with the lender. One fixed rate loan is generally better, but I don’t know what they are offering you. Sometimes 2 are better if you can pay one off within a year or two.
References :
If I understand it correctly, you can put 3% down but the puchase contract says 20% and now you are having problems with the loan right. You can make changes to your purchase contract without going to under writer but if you are trying to make changes to loan scenario then file have to go back to under writer depending on the state and Bank. If you are using a mortgage broker he can submit you file to multiple banks with out running your credit over and over again. Ask him/her to make sure lender takes there credit report. If you are using a bank or a direct lender then you have to stay with them. If you need a second opinion send me the scenario such as doc type, mid score, state and county you are buying in. I can tell you if it can be done or not.
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