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We are 1st time buyers. saw a short sale home online we may be interested in seeing. For financing, the listing says, conventional only...house is listed for 99,900..
wondering why they wouldnt want to go FHA as well.. Would anyone here have a basic idea as to why they only want conventional financing, for this short sale home??
another home we did drive by and see, is also a short sale, 125,000, BUT the listing says they except FHA and conventional and VA financing....wonder why 1 short sale home wants only conventional fin.. and yet another excepts all financing.....
also when going thru FHA financing to buy ANY home for sale, what are the requirements for the houses condition, before they guarantee the loan?
From what ive read, and was told, in a normal sale, if house needs some repairs, that could be negotiated with seller to fix them, or get it taken off sale price...but does FHA want the house to be in a certain condition before they guarantee the loan to lender to go ahead with sale?
could this be why some short sales or foreclosures dont want FHA financing, cause maybe the house needs lots of work and seller/bank knows this, and knows FHA wont do it??
I just want to get the details because IF this 1 house for 99K is worth it, they only want conventional fin. and i dont think we can do that....we dont have 10-20% to put down.. and i was told that with conventional, if your credit score is below 740 the rates can vary....ours is 720+....
anyways, id appreciate if someone can help with these questions....
We are 1st time buyers. saw a short sale home online we may be interested in seeing. For financing, the listing says, conventional only...house is listed for 99,900..
wondering why they wouldnt want to go FHA as well.. Would anyone here have a basic idea as to why they only want conventional financing, for this short sale home??
another home we did drive by and see, is also a short sale, 125,000, BUT the listing says they except FHA and conventional and VA financing....wonder why 1 short sale home wants only conventional fin.. and yet another excepts all financing.....
also when going thru FHA financing to buy ANY home for sale, what are the requirements for the houses condition, before they guarantee the loan?
From what ive read, and was told, in a normal sale, if house needs some repairs, that could be negotiated with seller to fix them, or get it taken off sale price...but does FHA want the house to be in a certain condition before they guarantee the loan to lender to go ahead with sale?
could this be why some short sales or foreclosures dont want FHA financing, cause maybe the house needs lots of work and seller/bank knows this, and knows FHA wont do it??
I just want to get the details because IF this 1 house for 99K is worth it, they only want conventional fin. and i dont think we can do that....we dont have 10-20% to put down.. and i was told that with conventional, if your credit score is below 740 the rates can vary....ours is 720+....
anyways, id appreciate if someone can help with these questions....
Banks are in the business of loaning money not making house repairs so often times something as simple as putting in a GFI outlet at outlets within 15' of water would make the difference between allowing FHA financing and not allowing it yet banks would rather just say cash or conventional only b/c they dont have the resources to be scheduling maintenance guys to come through.
Banks are getting better about this realizing its worth doing some minor repairs to make an extra 30k off a house but still not that widespread.
FHA can complicate things. I've heard really mixed things about what will be approved and what won't and even actual deals the condition varies.
I was told by one guy a hous wouldn't be allowed by FHA without having all appliances working nad a working furnace. Also been told that house has to have flooring however I bought a house FHA and it had no working appliances, no working furnace and no flooring downstairs.
Some say something as small as a sidewalk crack, cracekd window etc will kill a deal while others can get away with a lot.
Whoever has the listing probably knows it wont pass FHA. You could potentially do a 203k repair lona but heard trouble stories bout those
Thanks for replys... I too thought same thing... Maybe they all know it wont pan out with FHA cause of work needed to be done, however small or big the job may be... house has been on market 221 days...thats a long time at that price too, to not be bought up... I asked a mortg consultant about that fha 203K, if they dont take FHA how would they take that?? he said thats for people who already own their home... i thought that 203K was good for 1st time buyers and for short sales and AS IS properties, they could use that to rehab the place... maybe the seller /lender will negotiate the financing if someone shows interest....
Thanks for replys... I too thought same thing... Maybe they all know it wont pan out with FHA cause of work needed to be done, however small or big the job may be... house has been on market 221 days...thats a long time at that price too, to not be bought up... I asked a mortg consultant about that fha 203K, if they dont take FHA how would they take that?? he said thats for people who already own their home... i thought that 203K was good for 1st time buyers and for short sales and AS IS properties, they could use that to rehab the place... maybe the seller /lender will negotiate the financing if someone shows interest....
It would be smart to make minor repairs as I was told by my realtor over 95% of people buying now are FHA so your really limiting yourself to investors or cash buyers by not making some minor repairs.
Here's what I can almost gurantee will happen though. Obviously I dont know whats wrong with the house but my assumption. Rather than making $1000 in repairs to the house and selling to you who would be willing to pay asking price they will continue dropping the price until a cash buyer swoops it up. Probably in about 6 months and for about 30k less than you would have paid. I can almost gurantee this is exactly what will happen though
another home we did drive by and see, is also a short sale, 125,000, BUT the listing says they except FHA and conventional and VA financing....wonder why 1 short sale home wants only conventional fin.. and yet another excepts all financing.....
I don't usually run around being the grammar policewoman, but since you already got your question answered, I will say that "accept" and "except" mean almost exactly the opposite of each other.
What you have said here is that on the first loan, the bank will permit all types of financing but not conventional, and the second will accept all types but not conventional or FHA or VA. This is exactly the opposite of what you meant to say.
To "except" something means to exclude it. To "accept" something means to agree to it (or permit it).
Working in a real estate office, the difference between these two words is very important, since contracts get "accepted" and specific items get "excepted" (not included) from listings and contracts.
I now return you to your regularly scheduled posting. And you may commence flaming me for being bothered by this common mis-use.
Oh, and the problem with combining FHA and short sales is that FHA will likely have a list of required repairs, and on Short Sales, the seller's bank usually will not allow the seller to pay for any repairs. If the seller has money, they want it, since they are taking a loss.
So if the seller can't make repairs, and the buyer can't get the loan without the repairs getting made, there can be no purchase.
Those repairs can be anything. I've seen FHA require a wall to be repainted because the paint was chipped (on a newer house with no lead based paint danger). I've seen them require siding be replaced, or a garage door be replaced (and then repainted too). It isn't always just structural items, I have seen cosmetic items more than once too.
If they are saying "no FHA", they may have had a previous offer that was FHA and the inspector required items for the FHA loan that can't be done, so now they have to go conventional.
Lacerta, not flaming you.. hahaha... I know the difference between 2 words, just spelled it wrong, but knew what i was saying....
Thanks all of you for your replys again... my H is thinking about finding out how he could go conventional financing....maybe take a loan from his 401 k, but not sure how that works
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