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Old 06-10-2010, 03:16 PM
 
Location: Back home in California
589 posts, read 1,606,926 times
Reputation: 292

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DH and I are not in a position to put a downpayment on the purchase of a new home at the moment but the owner of the house we are renting, wants us to vacate so he can sell.

We wanted to wait a couple of years before buying but I can't stomach the notion of moving to another rental then moving again a year later after we scrape together a downpayment. 3 moves in 3 years is my worst nightmare.

This has forced us to consider a $0 money down loan such as an FHA or VA loan.

Despite the fact that we are still underwater in our California home, we can afford to make a payment on a smaller home here (perhaps a future rental for us) to tide us over until things settle out.

Do area builders have the right to reject our offer to buy a house because they don't like our loan?

Don't know the rules since we've previously used conventional loans with 20% down. Also thinking that since we lost so much in our California home despite being prudent with a 20% downpayment, we may not ever want to drop another downpayment into a hole. We lost our $80k downpayment on the last home and it is now worth $100k less than what we owe despite our $80k downpayment. So much for prudence.
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Old 06-10-2010, 04:26 PM
 
Location: Austin Texas
434 posts, read 1,166,370 times
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In short, yes. A seller can choose to not sell to you based on your financing. FHA and VA loans usually mean that the seller will be asked to pay some (or all) of the buyers closing costs. It's always negotiable however if the seller cant afford to, or if they have enough interest in the home they may pass, hoping someone will pay all of their own fees.

Edit: FHA will require an 3.5% downpayment...fyi
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Old 06-10-2010, 04:30 PM
 
Location: Austin, TX
7,189 posts, read 16,451,674 times
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I honestly don't think the builders would care -- they will be paid anyway. If you can get qualified for the loan, and someone is willing to lend the money, then why would they care?

I'm guessing 20% down is rare these days, the builders probably don't see that much. For a lot of people, 5-10% makes more sense with rates as low as they are.
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Old 06-10-2010, 05:33 PM
 
Location: Back home in California
589 posts, read 1,606,926 times
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Quote:
Originally Posted by CallDerek View Post
In short, yes. A seller can choose to not sell to you based on your financing. FHA and VA loans usually mean that the seller will be asked to pay some (or all) of the buyers closing costs. It's always negotiable however if the seller cant afford to, or if they have enough interest in the home they may pass, hoping someone will pay all of their own fees.
That is the main reason we are looking at new homes. We feel that builders would more likely be willing to pay some of our closing costs.

We are in a real bind because we are supposed to be going to Alaska to pick up an infant we are adopting at the end of November and our lease ends on October 15. All our funds are wrapped up in closing that legal transaction and travel expenses. I'm so angry at the owner of our rental house. When we moved in, we told him we hoped to live in the house for at least 2 years.

We would be buying any house under complete durress.

Last edited by XLadylawX; 06-10-2010 at 05:34 PM.. Reason: grammmmmeeeer.
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Old 06-10-2010, 06:29 PM
 
Location: Corvallis, Oregon
653 posts, read 1,561,638 times
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VA and FHA have inspection standards that might be stricter than what this seller wants to deal with.
Personally, I would not buy from someone who would not accept a VA loan (unless the price was so good, and reflected a condition that the VA would never approve.)
I also avoid lenders that jack up the rate for a VA loan (my lender was wondering why I was interested in the VA rate, when I was putting 20% down, and qualified for a non VA loan).

Do not buy under duress.
Rent something else.

The owner has rights too.
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Old 06-10-2010, 07:17 PM
 
Location: Great State of Texas
86,093 posts, read 73,653,944 times
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Can you not find another rental with a 2 year lease ?
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Old 06-10-2010, 07:50 PM
 
1,423 posts, read 2,130,146 times
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Quote:
Originally Posted by HappyTexan View Post
Can you not find another rental with a 2 year lease ?
The whole point is that they would rather purchase and not have to rent. One option is to certainly wait 2 years instead of 1, but I think the motivating factor here is that they prefer to own (or else they could just rent indefinitely).

If moving is all that onerous (and/or expensive), perhaps living quite spartan for a year while most of your belongings are in storage (or simply never unpacked) could work out.

To the original point, there are many developers who are still having financial issues who might have been unwilling to accept VA/FHA but who are now willing to work with you. I think the bottom line is that you never know till you ask.
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Old 06-11-2010, 11:27 AM
 
Location: Austin Texas
434 posts, read 1,166,370 times
Reputation: 159
Quote:
Originally Posted by XLadylawX View Post
That is the main reason we are looking at new homes. We feel that builders would more likely be willing to pay some of our closing costs.

We are in a real bind because we are supposed to be going to Alaska to pick up an infant we are adopting at the end of November and our lease ends on October 15. All our funds are wrapped up in closing that legal transaction and travel expenses. I'm so angry at the owner of our rental house. When we moved in, we told him we hoped to live in the house for at least 2 years.

We would be buying any house under complete durress.
There are builders out there offering 0% down again. DR Horton is one...You just have to be careful because if you have to sell for any reason any time soon you could find that you have to take money to the closing. If you're staying in the house for a while and are making extra payments here and there you should be ok.

Best of luck with the adoption!

Derek
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Old 06-11-2010, 12:26 PM
 
Location: Cedar Park
18 posts, read 47,002 times
Reputation: 13
As has been stated, yes they can. Because of the strict guidelines on VA lending some sellers do not want to have to deal with it. It could be because of the added costs to the seller and because of that you may be able to modify your offer in such a way to make it more appealing. As a Realtor it is never a good thing to let a potential buyer walk away. You never know when the next one will come along. See if you can talk with your agent and have him or her speak with the listing agent about how you could possibly structure the offer to make it beneficial to the seller. If that is not possible than there are plenty other homes for you to choose from.
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Old 03-01-2011, 02:18 PM
 
2 posts, read 4,932 times
Reputation: 10
We have a VA Loan and are trying to purchase in the Los Angeles area. We are flat-out rejected ALL the time by the banks on short sales and foreclosed homes.

We offer to pay closing, we agree to pay for any repairs needed to pass VA inspection, we offer above asking and STILL, there is a flat-out policy of "NO VA"...which to me says "WE DON'T APPRECIATE YOUR SERVICE TO OUR COUNTRY".

EFF U CHASE BANK!!!!
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