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Can I switch from an FHA loan to a conventional loan?

I am in the process of purchasing a house and have an FHA loan.  The restrictions are so much (which I was not informed of beforehand) that we are basically having to remodel the entire house so the inspector will sign off on it.  Can I switch to the conventional loan just to get it closed?  I've already made the down payment months ago but I'm sure I'll have to add more to it which is not a big deal.  And the home is in the family so I don't have to worry about the seller.
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April 06 2012 - Horse Cave
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Answers (4)

You can generally change loans without a big problem. Here in Virginia there is a paragraph in the Purchase Agreement that states "Buyer shall promptly, diligentl, and in good faith , undertake every action necessary to obtain such financing. Buyer's failure to do so, shall constitue a default of this Agreement. It also states that Buyer shall apply for the SPECIFIED  loan from (your chosen mortgage company) within 7 days of ratification.
 
 Read your contract. If you have Realtor, let them know and they should be able to guide you through the process to keep everyone happy and the process legal. If you don't have a Realtor, contact your attorney.
 The worst case scenario is that changing loans will delay your closing (make sure you change the closing date accordingly in the contract) and you may have to pay for a second appraisal since it sounds as though the FHA appraisal has already been done. Before you make any changes, speak to the parties involved and let them know this is what you want to do in writing. Since it is in the family, it will likely be easier than it would be than if you were purchasing from someone you don't know.
Good luck. I hope it gets easier from here!
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April 06 2012
Typically you can change - but the down payment is slightly higher.
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April 06 2012
You can switch the loan to conventional with minimum of 5% down however mortgage insurance typically requires a middle FICO score of 680.  Typically borrowers with scores lower than 680 go with an FHA loan.  If the property requires work have you considered switching to an FHA 203K renovation loan.  I would be happy to discuss options if you contact me offline.

Best of Luck,
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April 06 2012
what state are you located in and what kind of a loan to value are you looking for?
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April 06 2012
 
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Can I switch from an FHA loan to a conventional loan?
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April 06 2012 | 4 answers
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