Are you sure you're ready to buy a house?

[Racket_Man]

The SC is supposed to be bringing in his tax returns, paystubs, and documentation of his down payment next Thursday. I'm not sure why he's waiting a full week. But with a closing date in May, I suppose he's not in that much of a hurry.

I just remembered something else he mentioned. His 2015 tax return isn't going to show much income, he said. He took some time off work and lived off his savings. But that's the same year he had the bankruptcy. I don't think that's a coincidence. I'll ask for clarification when he comes in next week.

When I first applied for my mortgage way back in May of last year I applied to my bank. I signed all the forms for verification of taxes, income, $$$$'s in bank, pulling my credit report, etc. I gave them physical copies of and access to my Federal Tax returns for the prior 2 years.

The loan officer did question one or two things about my checking account as in why there were "large" cash deposits going into my account (because I am a pizza delivery driver and put my tips and mileage into the bank every 4 weeks) they thought I was being gifted $$$'s. I told them to pull 18 months history on the account and look at the "pattern" (every month like clockwork).

They wanted something -- I had it to them /e-mailed it ASAP.

How is this guy NOT doing a decent (say 10%) down payment?

As to closing costs I (from my recent experience) would assume that includes all of the paperwork fees, required state/county/local transfer fees and searches, title company fees for services, 1st P&I/PMI/property tax payment, (other stuff that I do not remember). my closing costs were right around $2000 PLUS stuff that was NOT in the official closing costs like my full year payment of home owners insurance premimum.

[MoonCat]

Re: That $1000 difference, to me the word "only" should never go in front of that amount of money. Maybe it's a big difference to this guy too. So in that case, why the heck is he even trying to buy a house? If his money is that iffy, he should just rent until he's got things in order.

[Sparklyturtle]

When we bought our house we got a call that we needed a cashier's check to put down earnest money for the house we wanted. Our money is in a bank that only has an on-line presence, so we weren't able to get a check from that bank. So, because I couldn't think of what else to do I went to the bank where I had an estate account I was executor for, got a cashier's check for the amount we needed, and took it directly over to the bank where I'd been told to take it. I knew we had plenty of money to pay the estate account back, but I'd been told that time was of the essence.

Well, I caught a lot of grief for doing that. Since the estate account and any inheritance I was going to get from it wasn't being figured into our income, it was considered a "loan" and we were told we had to pay it back immediately or we might not get the house because there was now a question about how we would pay for it. We were in much better shape than the guy in the original post, with a VA loan, excellent credit rating, and a steady work history, but I couldn't believe we got into so much trouble for borrowing money from an estate account just long enough to turn in requested earnest money.

[mhkohne]

Lesson learned: always have a 30 day clause where the new owner doesn't take possession until 30 days AFTER closing.

Just as a side item: I'd NEVER buy a house with that clause. There's no END to the trouble that could be caused by the old owner staying in the place after it's sold. You are the sort of person who'd be no issue, but think about all the SC's we hear about - what would one of those bozos do living in a house they don't own? No thank you.

Similarly, there's no way I'd let someone move in to a house I'm selling prior to settlement.

What needs to happen is your real estate agent needs to be damned sure that the buyer has loan approval some reasonable time BEFORE the settlement. I assume your agent wasn't kept up to date, but the buyer's agent should have been more on the ball and identified the problems ahead of time, preferably before making an offer!

[Argabarga]

Don't give person with sketchy history a loan? - You evil heartless bank! How is the little guy supposed to get ahead if you won't loan them any money unless they meet your impossible standards!?

Give person with sketchy history a loan? - You evil heartless bank! How is the little guy supposed to get ahead if you saddle him with debt and obligations you know he can't possibly pay off?!

This is why I couldn't work finance, without killing someone.....

[Captain Neon]

About an hour later, I get a call from the SC’s realtor saying SC is confused. I say he seemed fine when I talked to him. She says he doesn’t understand why he needs the cash for the down payment now – why can’t he save up until the closing date in May? I relay that when I spoke to him earlier, he said he had the cash, he just has to deposit it. She says he doesn’t have the cash yet, but he expects to save it up before May. And don’t we do no-cost mortgages? I say no, we haven’t done that in at least five years (longer, if my memory serves). She's sure it's been more recent than that, and we go back and forth a couple times before I simply say that we don't do them any more.

When my wife and I were looking to rent a house, we went to a few open houses and told the real estate agent that we had a house we were trying to sell unsuccessfully, and wanted to rent a house that we might consider buying later. Despite the fact that we already had a mortgage we were already paying, a monthly storage bill we were racking up, and no down payment money, every single real estate agent we spoke with told us to apply for a mortgage, "You never know!" They told us. Houses sit empty because most real estate agents haven't a clue!

[Victory Sabre]

Am I the only one who was surprised, based on what you've written about Goodhair in the past, he said no?

[Ghel]

The SC is supposed to be bringing in his tax returns, paystubs, and documentation of his down payment next Thursday. I'm not sure why he's waiting a full week. But with a closing date in May, I suppose he's not in that much of a hurry.

I just remembered something else he mentioned. His 2015 tax return isn't going to show much income, he said. He took some time off work and lived off his savings. But that's the same year he had the bankruptcy. I don't think that's a coincidence. I'll ask for clarification when he comes in next week.

[taxguykarl]

ladyjaneinmd is right. This individual does not seem to understand how this works....another foreclosure waiting to happen.

[dalesys]

There's always more to the story.

Said Pule Horky.

[CyberLurch]

I'm guessing there's more to this story.

There's always more to the story.

[Captain Neon]

Being pre-approved doesn't mean anything. I relocated out of state and lived in an apartment until our realtor was able to sell our house. We had a guy under contract that was pre-approved. We cleared out our house and put our worldly goods in moving company storage until we were able to move out of apartment, anticipated time was maybe two months. On the day of closing, the bank notifies us that the loan has been denied. The jerk wasn't even interested in renting our house from us until his credit improved and he could get a mortgage on his own! I paid a mortgage for 6 more months and storage for a year until we finally moved into a rental house. Lesson learned: always have a 30 day clause where the new owner doesn't take possession until 30 days AFTER closing.

[eltf177]

Being that this guy's story keeps changing every time you talk I'm not surprised everyone (including Goodhair) is wary of this.

If he's pre-approved by the other bank he'd better go with that. That is if he really IS pre-approved...

[ladyjaneinmd]

If I were a bank, I'd certainly be worried. If he's that confused about his finances, who's to say that he won't be confused by that pesky mortgage payment that will come up every month? And which girlfriend will he blame *that* problem on?

[seigus]

Wow. Some people just don't seem to understand why banks may be wary of taking risks. Tens of thousands of dollars of risks. I'm guessing there's more to this story.