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Please understand this is new to me. I have never bought a home before. The home I found was bought 4 years ago for $435. A couple months ago they tried to sell at $375. They now offer it at $340/short sale. It was just apppraised for $350. I offered $320. The seller accepted and the sellers lawyer who is far along with the bank said she is 99% sure the bank would accept. (Someone recently offered less and they mentioned they needed just a little bit more) I was prequalified. Then I went to be preapproved. I believe I was? He sent me a letter and the real estate agents a letter. Then I had the home inspected. The inspector said its a good house and he didnt find anything major at all. I am doing an FHA loan. I am a first time home buyer. I need to put 3.5% down. I have $13,000 saved, so I have enough for that.
Now they want me to sign contracts but in the past when we were looking at homes I made it clear I wanted to roll in the closing costs. Theyre telling me a bank wont do that b/c its a short sale and they are so far along with the bank that they could close at the end of October! the mortgage broker says not to worry that for a little higher interest rate (I believe it was 4.25 they would give me $7k at closing. Now Im stuck b/c Im afraid to sign the contracts. Im afraid I wont be able to save enough by closing. What would happen then? I really feel like I have NO idea what Im doing. I do have a lawyer. I also have a buyers agent. Its just a second language to me. I feel like they talk so fast. I really do not understand whats going on, what to do next etc! HELP
Oh and Ive already called 2 different lawyers and asked them all about purchasing a home while still married. In NY state if he fought me for it during our divorce (which Im not 100% were going to do - getting separated first) he would only be entitled to half of whatever the house appreciates from when I buy it to when we are divorced. But please lets not talk about that topic.
I need someone to clearly state what I need to do in steps. I am sorry Im so lost and I dont think they get it. Who would be able to tell me exactly what the closing costs would be? Exact - so I know! How can i sign before I know?
Your lender should have given you a good faith estimate as required by law. Your closing costs are spelled out in that document.
If your buyer agent and attorney can't communicate what is happening in your transaction in a way you can understand call the buyer agent's principal broker and see if they have a better communication style.
Please understand this is new to me. I have never bought a home before. The home I found was bought 4 years ago for $435. A couple months ago they tried to sell at $375. They now offer it at $340/short sale. It was just apppraised for $350. I offered $320. The seller accepted and the sellers lawyer who is far along with the bank said she is 99% sure the bank would accept. (Someone recently offered less and they mentioned they needed just a little bit more) I was prequalified. Then I went to be preapproved. I believe I was? He sent me a letter and the real estate agents a letter. Then I had the home inspected. The inspector said its a good house and he didnt find anything major at all. I am doing an FHA loan. I am a first time home buyer. I need to put 3.5% down. I have $13,000 saved, so I have enough for that.
Now they want me to sign contracts but in the past when we were looking at homes I made it clear I wanted to roll in the closing costs. Theyre telling me a bank wont do that b/c its a short sale and they are so far along with the bank that they could close at the end of October! the mortgage broker says not to worry that for a little higher interest rate (I believe it was 4.25 they would give me $7k at closing. Now Im stuck b/c Im afraid to sign the contracts. Im afraid I wont be able to save enough by closing. What would happen then? I really feel like I have NO idea what Im doing. I do have a lawyer. I also have a buyers agent. Its just a second language to me. I feel like they talk so fast. I really do not understand whats going on, what to do next etc! HELP
Oh and Ive already called 2 different lawyers and asked them all about purchasing a home while still married. In NY state if he fought me for it during our divorce (which Im not 100% were going to do - getting separated first) he would only be entitled to half of whatever the house appreciates from when I buy it to when we are divorced. But please lets not talk about that topic.
I need someone to clearly state what I need to do in steps. I am sorry Im so lost and I dont think they get it. Who would be able to tell me exactly what the closing costs would be? Exact - so I know! How can i sign before I know?
Call your buyers agent and tell them exactly what you just told us - in fact, print this out and bring it to them to read. They should be looking out for your best interests and be able to give you an honest opinion of your situation.
In my opinion, you are getting in over your head.
I would strongly encourage you to reconsider buying at this time. Getting separated and possibly divorced is not a great time to be purchasing a home. Sign a years lease somewhere and let the dust settle honey.
"In my opinion, you are getting in over your head...."
I agree with this statement. You've got a lot of irons in the fire. You don't even know your legal status as far as rights to whatever property that you may purchase at this point, an issue that could come back to bite you very hard later.
I think that you may be buying more house than you can afford by not having the down and closing costs already in the bank. Normally lenders will want to see that you have enough cash to close and make the first month's payment easily prior to closing, at least they do up here. If you don't have much money in the game so far I'd walk away post haste, find a nice place to rent and get your life in order and then maybe buy a house when you have straightened out your marital and financial status.
This is advice from someone that has been separated, then divorced and did pretty well with real estate thereafter. I know what I'm talking about.
I agree with everyone else, if you can walk away right now you should.
What are you going to do if you get back together? Since you're not getting divorced I assume there is still a chance of that.
As for exact closing costs, good luck with that. The final number on my recent purchase ranged from $3k to $15k as late as 16 hours before closing. Your loan officer should be able to tell you what all the fixed costs will be but they can't tell you the variables.
You do realize that you're going to need "reserves" in the bank after you pay a down payment and closing costs right? That would include your taxes and insurance. In the price point you're talking about, that's going to be at least $3k a month, no? That would mean if you needed 3 months reserves, you have to have another $9k on top of everything. Do you have that?
Do you also realize that your husband's credit is going to come into play since this is a government loan? If it was conventional, they could probably ignore him, but if you currently own a home and you're still married, all that debt comes into play.
I don't mean to be disrespectful at all, but did your husband manage the finances when you were married? I'm really concerned that your attorney and agent aren't able to help you understand what is happening in your transaction and it made me wonder if you lack financial management skills.
If you're worried about having to know the exact amount of the closing costs, it sounds as though buying this house is a stretch for you financially. What will you do when/if something major goes wrong if you don't have an extra $1000 now.
I think you've been given extremely good advice so far and I agree with the concern coming from you not being able to understand your attorney or agent. If neither or both together haven't been able to give you enough information to answer your questions, I don't think you're ready for the higher finance of a house purchase and maintenance issues.
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