Advice on Purchasing a Short Sale - First time home buyer (Valley Stream: short sales, foreclosures)

[Stacey-AnnR]

Hello all,

I am interested in purchasing a short sale property in valley stream. It is a 3 Bedroom 1 Bathroom cape. It is in very good condition. The asking price is set at 250K. I was initially looking in Queens and then this opportunity was presented to my realtor. She said that it will work because the taxes are - low 5k.

I am currently renting and need a bigger place (We have a son who needs a bigger room). I do not want to continue renting if I can pay couple hundred more a month and have something to call my own.

I recently paid off my credit cards and car, so my debt is zero. My credit is excellent. The problem lies with my income (53K) because I do not have a co-signer. My fiancé is repairing his credit.

My fiancé and I make about a min 89k combined not factoring my overtime (and his when he has the opportunity to do it). He is a Telecomm contractor so he can make a lot more than that depending on the available jobs. He will actually be starting the NYPD within a year or so that will lower his income tremendously but then it jumps to 35k after 6 mths of employment and the ability to do overtime.

I am trying to get a foreclosed/short sale so that I can put 3% and use the rest of my savings as an emergency nest egg. From my calculations we can afford the house (mortgage, water, gas or oil and all the other misc. everyday bills)

What is your feedback? Should we continue to rent and save up a bigger down payment in the next few years or take advantage of the flood of foreclosures and get something that will allow us to afford a house?

[SIZE=3]If we have a bigger down payment it might not be as cheap as putting down 8k on a 250k house as opposed to putting down 15-20% on a 400,000k house ( if prices are still that high) [/SIZE]

[SIZE=3]I hope I made sense this house purchasing process is nerve racking so much to learn. [/SIZE]

[GigiBowman]

Why is your realtor not answering these questions for you?

[TomMoser]

First, you need to be aware that with short sales, the bank has absolute discretion about whether to accept the offer or not, and many of them are being very difficult about it. Expect a long and drawn out process.

Also, you are putting the cart before the horse looking at houses before you speak with a mortgage professional. You could just be setting yourself up for disappointment. If you are putting down 3% and your co-signer has some credit issues, I would suggest that you find someone experienced in FHA loans, since they tend to be a little more forgiving.

[Tony V]

Tom makes a good point about the time and hassle factor....you should try for FHA, however do a little research in the area you may find a better deal. Take a good hard look at the neighborhood. Be sure it is what you want. Valley Stream is tight to the city so that will be benificial for your fiance (how the heck do you get that little thing over the e ??).

[GigiBowman]

you are so right Tom! Long and drawn out is certainly the case! Now they have short sale people who do all the "dealing with bank" for a percentage of commission. optionnext.com is one I know of.

[wickedkhalsa]

Very lengthy process and very frustrating....it could take a few months and you could waste money by having a home inspected with no guarantee that you offer will be accepted by the bank...


looking at your income, debt, credit you should get a loan for 250k... I just got one in similar situation...

[CharlesEsq.]

Go speak with a mortgage professional first.

If you do end up going into contract on a short sale, please note that your purchase contract will be contingent upon the bank approving the short sale. That is to say that, you may wait 6 or 10 weeks in contract (hey gigi) and go through the process of getting a mortgage commitment, only to find out that you will not be buying the house. However, short sales are done all the time now, and you wouldn't be in that boat alone.

[Kbinspections]

Get a good attorney that is very familiar with short sales.Good luck.......

[GigiBowman]

Charles? Is that YOU? lol

[Tony V]

Check out this articule about short sales...

Realty Times - Investor Report: Fannie Mae and Short Sales