2.25.2010

Under Contract, Now Where's My Loan?

It's funny how so many things in the home buying process are backwards. You can get pre approved to buy hundreds of thousands worth of real estate but nobody will promise to give you any money for it until you have already signed a contract saying that you will buy it. On a resale you fall in love with a house but it's only until after you have signed the contract that the home inspection is ordered that could ultimately break the deal if there are any problems. We've agreed to buy a new construction house that is nothing more then a pile of dirt with some stakes in it at this point. We don't know exactly when our closing will be because it's being built as we speak. We don't even know what our interest rate will ultimately be on the loan and yet we have signed the dotted line that we want the money. Even once we receive final credit approval an outside lender won't agree to the loan amount until the house is appraised for the purchase price which can't be done until the darn thing is mostly built and that likely won't be until April. We are supposed to be moving in May!It's backwards. And it's the way it's done.

We are almost 30 days out from contract signing and we still don't have financing in place. Not for lack of trying. Run back and forth with paperwork. Wait. Get pre approved. More paperwork. Submission to underwriting and more waiting. This is our 3rd time initiating this approval process for a variety of reasons. With less then a week before our 30 day time limit to secure financing we are told by the builder's lender that they will not offer us the loan we want. They are telling us if they don't get some type of credit approval for us in place by Tuesday we will be 100% denied from any loan at all with them. We don't want to spoil our chances completely but we also don't want to get stuck having to go with a loan program we don't want. We submitted a loan application to our bank Monday. It will be great if they approve us for what we want but that also means $6,700 builder credit towards closing cost that we were anticipating with use of the preferred lender is now in jeopardy. They might still give it to us but they might not depending. Did we officially get rejected? NO. Did we refuse their counter loan? YES. Or did we agree to their counter offer and get accepted but just don't want it? DON'T WANT TO TAKE THE CHANCE. If we do, we may definitely stuck without the closing costs credit if we choose our bank and the loan program we want over theirs with the one we don't. That's a lot of money to just kind of not know if you are going to have.

Buying a house is not for the faint at heart I will tell you that much. There are variables and unknowns at every step of the process that could make or break everything. There is so much money involved and no average Jane could even begin to understand 1/2 of the paperwork that must be signed along the way. You are making plans to move in the not so distant future yet nothing is guaranteed until you go to closing and they put the darn keys in your hand. I've heard of people getting denied on a loan just 1 day before closing!

For the organized-plan ahead-like to be in control-type like myself this is a nightmare. I am so over it. I want this house but I also want off this wacky roller coaster ride of confusion and uncertainty.


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