Profile picture for daveylin

Changing Financing after Contract?

We wrote an offer with my fiance and I together for a short sale listing FHA as the loan type.  We later found out I qualify on my own for a conventional loan and we would like to change to conventional if the bank accepts... does anyone know if there will be any issues taking my fiances name off and changing the loan type?

Thanks,

David
  • November 15 2010 - San Jose
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Answers (6)

Correct in putting in writing your intentions so all can sign on it.  If you don't, and then something adversely affects your new loan that you can't close on time, or that loan falls apart for one reason or another, then your deposit will be at risk.  The Seller has the right to know what kind of loan you are trying to get and especially these days, the loan you were approved for.  If you change loans without informing in writing, with all signatures, and something happens it could cost you.


Angela White
Alain Pinel Realtors
  • November 29 2010
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Profile picture for Mills Realty
This should not create an issue.  You will want to make sure the short pay lender is aware of it as they approval letter will need to be amended.  However, as long as you qualify it shouldn't be an issue.
  • November 16 2010
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Profile picture for Rescom Financial
Hello,

Congratulations on your home purchase. You will need to complete an addendum to remove your fiance and submit that to the buyers agent and your loan agent. Since it is a short sale, you will likely also need to send this to the lender that presently holds the loan on this home for review and acceptance . The good news is typically real estate agents and lenders alike prefer Conventioanl financing to FHA financing.
  • November 16 2010
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Profile picture for P Banks
You should do an addendum, just to keep everyone up to date. Generally the sellers don't care how they get paid.
  • November 16 2010
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Has your offer already been accepted by the seller?  Has the short sale already been approved by the bank/lien holder?  If you use the same lender it should be okay to simply switch the type of financing.  If you change to a different lender, you may not have time to start the loan process all over again.  You may also need to do an addendum to remove your fiance' from the purchase contract if her name will not be on the loan. 

  • November 15 2010
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If your offer gets accepted, your agent, the listing agent and the seller most likely will not have a problem with this change after the fact.

If all the offers have not been reviewed by the seller yet, you will want to ask your agent to ask the listing agent if you can better your chances of getting your offer accepted with this change. In my area a conventional loan is usually considered a step up from an FHA loan because of the larger down payment and other strict FHA guidelines.
  • November 15 2010
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