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[quote=PeaceOut001;38589388]Help me out here. If the seller (I'll assume the OP meant buyer) walked out a week before closing, wouldn't the mortgage amount have been approved a bit before that? I understand the debt to income ratio may have changed but it just seems like there's something else in this picture we don't see or know.
The lender covers themselves though. The places I'm familiar with, the lender always makes a last minute check. They can check credit card usage, checking accounts, credit reports...anything as a final check on whether they have a good purchaser in place still as before.
Many realtors will remind their buyers to not buy anything big, even seasonal clothing; to not apply for anything until the settlement is over.
I am really speaking to a buyer that is buying a home to live in, one that they can get a decent price
on and not get into backups, multiple bids, just purchase smart. Investors that is a whole other catagory.
They are in the know on short sales and foreclosures, I am sure they back up and fight for cheap properties.
If you really like the property and the structure of the offer has contingincies that may make it weak, like the other poster says, there is no downside to have a right of refusal in a back up position.
Thank you for your input. Yes,We had a house for sale and a week befor the closing I got the phone call that said,"due to the buyer getting a loan for a car" lowered something that the loan fell through. Do I have any grounds to get any money for the time it stayed off the market?
What happened is the buyers debt to income ratio (aka DTI) changed when he bought the car. If the payment was 450 bucks and that was free to use on the house now it's reallocated to the car purchase. Unless the buyer got a 450 dollar raise to offset the purchase he now can't afford the house as far as the bank is concerned.
Kind of stupid because buyers are told not to go and make any large purchases such as cars furniture or shopping sprees.
The buyer most likely forefeited any deposits but I would go see a lawyer because you may have all sorts of legal venues to use.
No kidding. Don't most buyers know this even without being told? It's just common sense.
No kidding. Don't most buyers know this even without being told? It's just common sense.
It's not. You are 'approved' for the loan, credit check done, finances set. No one told us when we first bought a house not to make any big purchases. It may be common sense for some, but those navigating the market for the first time may not realize that you may have everything ready to go, doesn't mean the financing will go through.
It's not. You are 'approved' for the loan, credit check done, finances set. No one told us when we first bought a house not to make any big purchases. It may be common sense for some, but those navigating the market for the first time may not realize that you may have everything ready to go, doesn't mean the financing will go through.
That's why you need to have a good mortgage broker and realtor, they should tell first time buyers about this.
We knew about it when buying a house for the first time through doing research, but were reminded by our broker and realtor. We didn't even touch our credit cards once we started looking for a house, never mind buying a car.
No kidding. Don't most buyers know this even without being told? It's just common sense.
Nope. Most buyers don't know this.
People don't understand how the system works. They get excited and buy furniture on one of those deferred interest programs through the furniture store...which now counts toward their debt to income ratio. I go through the process thoroughly with my buyers during buyer consultations. No changing jobs and no buying new things.
It's not. You are 'approved' for the loan, credit check done, finances set. No one told us when we first bought a house not to make any big purchases. It may be common sense for some, but those navigating the market for the first time may not realize that you may have everything ready to go, doesn't mean the financing will go through.
That was the first thing our loan officer told us even before we were in contract. Do not apply for new credit or rack up debt..I thought this is pretty much common sense but then again if a buyer is green to the home buying process and doesn't have a good LO who guides them I can see them making this mistake although IMPO it's pretty much common sense.
ETA: To the OP: I don't think you have any recourse. Most sales contracts state that the contract becomes void if the buyer is unable to obtain financing and they are entitled to their escrow $$ back.
FWIW: The house we are in contract now was in contract before. The previous buyer wasn't able to obtain financing either..his credit score was high but he didn't disclose that he was a co-signer on another mortgage which brought his DTI over the max. No bank would would touch him. It worked out well for us thank God and from the time his contract was released till the time we went into contract on the house was less than a month. Hope you find another buyer soon.
Buying something to ruin the ability of getting your loan, sounds like a giant loop hole to get out of buying a home. Then you also get your $$$ back. They need to start putting it in the contract that a buyer agrees to not do anything to damage their loan process, or they lose $$$.
Our buyers spoke in Spanish about how they had already found a renter for the home, on a FHA loan, in front of a Spanish speaking loan officer. Also a week before closing. I've always wondered if they did it on purpose, to insure getting back their good faith money. Man it was hard signing the money back to them.
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Also a week before closing. I've always wondered if they did it on purpose, to insure getting back their good faith money. Man it was hard signing the money back to them.
