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I will try to fill you in as much as possible without making this into a book
About 4 months ago my wife and I decided it was time to sell our townhouse and go into something bigger in the event we might want to have a family.
So we got with a lender and starting talking options let them know how much we would want to put down and such and get an idea what we could do. All in the talks went well so we put our house on the market. Well 3 months later we got an offer on our townhouse we really like and took it and we also found a house we love. All was right with the world. Then a setback hit. I got laid off from my job about a week ago and we are closing on my house which is sold and was suppose to close on the new house we are buying on Sept 10th. However we me being laid off despite the fact we can easily still afford the house as we have good savings, and i am going to get unemployment as you know banks do not count unemployment or investments as income. So we decided to get my father in law on the loan. He has a ton of money but also a lot of debt based on home loans and such. So we ran into a problem where his debt to income with mine and my wives came to 54% because of all the homes he has an such. So the lender we had been working with for so long said they could not do it with 54% debt to income. So we went to a mortgage broker who said he thinks he could get it done and everything is moving along nicely. However it still needs to be signed off by the underwriter this week to finalize so there is a chance it might not get done. I would say it is 70/30 in favor of getting done. However the house we are buying the sellers want me to put the rest of the down payment down that was listed in the contract. We put $1,000 down need to put another $9,000 down first thing tomorrow. Here is where my question comes in. I am the type of person who does not trust anyone that I do not know. Especially lawyers. I asked my lawyer 4 times in 4 emails the last 2 days to explain to me BEFORE i give him the other $9,000 are there any ways I could lose any of my deposit should I not get the loan approved and if so what are they. He has avoided answering the question in terms I could understand. This makes me uneasy as that is a lot of money to give to someone. Should I fire him? If I do I risk losing the house as with Sept 10th right around the corner and needing a new lawyer and the seller already breathing down my neck to get that $9,000 in it could be risky
Does your contract on the new home have a financing contingency? Generally speaking, the only way you can forfeit your deposit is thru a default. If you don't make the second deposit, will you be in default? If so, look at your contract under default to see what happens. If you have a financing contingency, you were probably required to provide a loan commitment by a certain date and, if you could not, you'd have the right to ack out with your deposit money but only if you gave notice in time. You need to read your contract to see what it says and ask your attorney to give you likely scenarios. One reason you might not be getting a firm answer is that there may not be one. Sometimes it depends on what the other side decides to do.
Does your contract on the new home have a financing contingency? Generally speaking, the only way you can forfeit your deposit is thru a default. If you don't make the second deposit, will you be in default? If so, look at your contract under default to see what happens. If you have a financing contingency, you were probably required to provide a loan commitment by a certain date and, if you could not, you'd have the right to ack out with your deposit money but only if you gave notice in time. You need to read your contract to see what it says and ask your attorney to give you likely scenarios. One reason you might not be getting a firm answer is that there may not be one. Sometimes it depends on what the other side decides to do.
Problem is the attorney he is acting too busy to answer my emails. Only thing he wrote back was that I need to put in the rest of my down payment tomorrow of they might back out
Problem is the attorney he is acting too busy to answer my emails. Only thing he wrote back was that I need to put in the rest of my down payment tomorrow of they might back out
He is telling you in not so many words to either adhere to the terms of the contract or cancel. The contract is written and signed. No one can or will advise you what to do.
Problem is the attorney he is acting too busy to answer my emails. Only thing he wrote back was that I need to put in the rest of my down payment tomorrow of they might back out
Is there a financing contingency? Are you willing to pay cash if you can't get financing? If yes to both questions, then paying the second deposit shouldn't be an issue and you might propose an addendum that removes the financing contingency in return for more time for you to either get the loan or get liquid. You can include a slightly later closing date.
If your goal is to get out of the current contract, don't make the second deposit if that is your choice and try to get the seller to understand your situation and possibly get your first deposit back. If your goal is to stay in but change the terms, it sounds like you already have your attorney's best advice.
One other thing and I mean this in only a helpful way...you said you don't trust anyone you don't know but you are seeking advice on the Internet presumably as a replacement for the attorney you've hired. I think you'd agree that makes no sense, really, so use your attorney even if you have to go there and sit in his office. He has a responsibility to you so hold his feet to the fire to serve you but please regard his advice as best as you decide what to do.
Last edited by bbronston; 08-28-2013 at 09:20 AM..
Yes I could by the house straight out if I wanted to. But I do not want to touch my investments
Sounds like you're the problem.
You lose your job, and blame the lender for not being able to move forward. You "could buy the home outright" but don't want to touch your investments. Therefore, you could pay down whatever debt is causing your wife's 54% dti. But you don't want to.
Why is everybody else supposed to be jumping through hoops to make this happen? Yes, you will lose your $10k if the seller is calling for full DP with no contingencies. And you would deserve to lose it.
Pay your debts down so you and your wife can buy the house, or increase your down payment, or buy the rate down.
You lose your job, and blame the lender for not being able to move forward. You "could buy the home outright" but don't want to touch your investments. Therefore, you could pay down whatever debt is causing your wife's 54% dti. But you don't want to.
Why is everybody else supposed to be jumping through hoops to make this happen? Yes, you will lose your $10k if the seller is calling for full DP with no contingencies. And you would deserve to lose it.
Pay your debts down so you and your wife can buy the house, or increase your down payment, or buy the rate down.
THIS ^^^
As they say, you're doing it wrong.
I sure hope the rate on your investments is higher than the interest rate on your debts.
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