Putting in an offer on house even though financing isn't approved

[palmcoasting]

If your mortgage broker is telling you that you can't get a loan because of your credit issues, then yes, you are getting your hopes up. The first thing is to get your financing. If you can't then the rest is moot regardless of what a real estate agent is telling you. There are two things that come before anything.. can you get a mortgage and can the property appraise in value. If the first can't happen then it doesn't matter about the second.

[gbone]

Originally Posted by giampa

...before the house can have a short sale package even submitted.

The owner is also a good friend of ours and we are trying to work everything out (as far as timing) so that we are able to put an offer in that can be accepted and then stay in this house.

Here is what we have done so far:

*Met with a loan officer (who also happens to be a good friend of ours) who told us that based on our income, he can easily qualify us for a $175k loan.... as soon as we get our credit cleaned up.

*Confirmed with the listing agent that we would like to use him as our buying agent


*Taken and submitted pictures of the house and the property w/our agent

*Met with "Dedicated Credit Repair," a credit repair company that we were referred to for help with cleaning up our credit. The lady we spoke with said that within 90 days, we should be more than ready to be approved for a home loan

*Set an appointment for Thursday evening to submit an offer on the home with the short sale "package" (which is what threw up a red flag for me and was the cause for my questioning...)


Maybe we are just being foolish and seriously wasting time. I would LOVE to stay in the home we are in. I love our neighborhood and we are really close to my family. Plus, we wanted to try and buy around July of 2010, so in purchasing NOW, we are just speeding up the process (or at least attempting to), but I don't want to get my hopes up that there might be a possibility if we don't stand a chance.

Based on your posts it appears that you are putting the cart before the horse as well as increasing your potential risk in this transaction. You say that you won't be ready to be approved for a loan for at least ninety days because you have to clean your credit up. You have a minimal amount of cash for a down payment. You are planning on using the agent of the seller whose job it is to represent the best interests of the seller and not yours. You have a seller who is in financial difficulty who happens to be a good friend of yours. Do you believe that he will put your financial interests above his? Your husband is confused about the whole process even after talking with different people. You're not sure what you need to do and seem to be making more of an emotional decision rather than a rational one. You've met with a loan officer who says that you must get your financial situation fixed before you can qualify for a loan.
If you can't presently qualify for a loan why do you want to make an offer that you can't follow through on? Also, just because a person can qualify for a loan doesn't mean that they should take out that loan. If your credit score is not high enough you will be paying more in interest and closing costs. Why would you want to do this? Also, what type of loan are you looking at? Hopefully not some type of ARM or interest only loan.
You are "just being foolish and seriously wasting time" only if you do one of a couple of things. First if you proceed with making an offer before your financial affairs are in order you will be making a serious mistake. Get your debts in order so that you have a high enough credit score to get cheaper financing on some type of conventional loan. Also, have enough money to put down so you will have some skin in the game, not be burdened by PMI expenses, and you have enough cash set aside to maintain the home. Second, don't fall in love with a house before you own it. If so, you are more likely to make an emotional decision that is completely irrational and not in your best interest.
Based on what you have said in your posts you are not ready to purchase a house. Don't make an emotional decision that you may seriously regret later. If you do you will increase your chances of ending up as just another statistic in the housing correction that is currently going on.

[giampa]

Originally Posted by gbone

Based on your posts it appears that you are putting the cart before the horse as well as increasing your potential risk in this transaction. You say that you won't be ready to be approved for a loan for at least ninety days because you have to clean your credit up. You have a minimal amount of cash for a down payment. You are planning on using the agent of the seller whose job it is to represent the best interests of the seller and not yours. You have a seller who is in financial difficulty who happens to be a good friend of yours. Do you believe that he will put your financial interests above his? Your husband is confused about the whole process even after talking with different people. You're not sure what you need to do and seem to be making more of an emotional decision rather than a rational one. You've met with a loan officer who says that you must get your financial situation fixed before you can qualify for a loan.
If you can't presently qualify for a loan why do you want to make an offer that you can't follow through on? Also, just because a person can qualify for a loan doesn't mean that they should take out that loan. If your credit score is not high enough you will be paying more in interest and closing costs. Why would you want to do this? Also, what type of loan are you looking at? Hopefully not some type of ARM or interest only loan.
You are "just being foolish and seriously wasting time" only if you do one of a couple of things. First if you proceed with making an offer before your financial affairs are in order you will be making a serious mistake. Get your debts in order so that you have a high enough credit score to get cheaper financing on some type of conventional loan. Also, have enough money to put down so you will have some skin in the game, not be burdened by PMI expenses, and you have enough cash set aside to maintain the home. Second, don't fall in love with a house before you own it. If so, you are more likely to make an emotional decision that is completely irrational and not in your best interest.
Based on what you have said in your posts you are not ready to purchase a house. Don't make an emotional decision that you may seriously regret later. If you do you will increase your chances of ending up as just another statistic in the housing correction that is currently going on.

Wow. Thank you so much for your honesty. Yeah, I think that I would definitely agree that I have been basing my decisions off of emotions and not anything else.

We were looking at conventional 30yr fixed FHA loans. I'm not sure what the listing agent is thinking and although he seems like a nice enough guy, I understand that his main job in this whole transaction is to "represent the best interest of the seller."

Hmm.. well. Perhaps then we should wait on this whole ordeal. It sounds like July of 2010 is a more realistic goal for us.

Thank you again for your input, I really appreciated it!