Profile picture for paftaf

Need advice about extensions and delays

Hello,
Here is my situation: I found a great property, I love it. It's been on the market for 2 years and did not receive much attention, and we settled on a price much lower than the list price. We signed the contract, and I need to close in 2 weeks.
I bring about 30% down payment, I have an overall great financial situation, and got a great loan offer. Now, the problem is that I am changing job, and cannot finalize the loan until I have my first paycheck. I am interviewing and I think I'll start my new job early July.  
What should I do?
1. I could give up for now, and try again once I have a job
2. I could co-sign an FHA loan with my best buddy, and later refinance with a conventional loan 
3. I could ask for an extension
4. give money to the seller to buy time
 
I am thinking about a combination of #2 and #3. I would get pre-approved for the FHA loan, present it to the seller's agent and ask for an extension to allow me to start my job and actually purchase with my conventional loan. The FHA loan would be a "backup" which guarantees that I will buy, whatever happens.
 It is my first home, and I am looking forward to reading your recomendations and advice.
 .JohnW.
  • June 04 2012 - Boulder Creek
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Answers (6)

Best Answer

Profile picture for sunnyview
Ask for an extension of the closing date in exchange for maybe putting your down payment money in escrow, perhaps offering a non refundable deposit for an extra 45-60 days and possibly waiving any remaining inspections. Whether the seller accepts, really depends on how good your local market is right now for that type of property.

I would opt not to get a joint mortgage with your friend because of the double loan cost, FHA fees and because of possible entanglements.

It sounds like you really like the property so I would be honest about your job change and offer the seller information about your credit score etc to make them feel more comfortable. If I were the seller, I would want to sell to someone who really loved the place unless I was nervous that they would not close.
  • June 04 2012
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Profile picture for paftaf
Thank you for your comments.
Seller accepted my request for an extension.
  • June 09 2012
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Profile picture for paftaf
Sorry for the misunderstanding David.

Here are the people involved:
- the seller
- the seller's agent
- my agent
- my banker
- me

My agent is a good guy, very knowledgeable. 
  • June 04 2012
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Profile picture for hpvanc
David Barr,

I don't see anywhere in Paftaf's post that they are seeking advice from agents.  It is possible and likely they are hoping for peer to peer support.  That is one wonderful aspect of posting a question on an open forum. 
  • June 04 2012
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  • June 04 2012
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Profile picture for paftaf
hello,

thanks for your answer.
Yes, I would also prefer not to do the FHA loan. My best friend is really cool, but she already has a lot on her plate, and I don't feel good about giving her more trouble.

In terms of cost, here is my understanding: If I don't use the FHA I just need to pay $500 for the duplicate appraisal. That money is lost. If I need to use the FHA loan, the rates and fees are much higher, and I need to keep it for at least 90 days before refinance. That's expensive, maybe $6,000 lost.

I will explore the options you suggested:
- release the deposit
- put my down payment in escrow

I released the other contingencies (inspections)

I have written a letter to the seller to tell her how much I like her house. She is an old lady, and she's not in a rush to sell, but she needs certitude and peace of mind.

  • June 04 2012
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