Ok basically this is what happened....we got burned by our absolutely aweful first LO. He ran our credit, looked at our income and preapproved us for $225k on Oct.1 shortly after that we went under contract on a home for $185k 6%SA no downpayment (VA ). We paid for the inspection and all was going well until we realized that we had not heard from LO for almost two weeks after we signed loan docs. When we called he told us that he was having trouble getting us through AU but he wanted to keep trying. When we asked what the issue was he couldn't tell us. After having to extend the mortgage commitment date, we started to really worry that this dude did not know what he as doing. He stated saying there were credit issues but these were the same reports he used to preapprove us. After another week with no answers, we found a new LO who is AMAZING. He went over every item on our credit report with us and started the pre-aporval process...meanwhile the previous LO just stopped calling. It turned out the issue was not our credit it was our income based on the amount of itemized deductions we claimed on 2011 taxes. So on paper we could not afford this house. Our new LO gave us two options......get a $50k gift for a down payment (we qualify for $135k) or find a co-signer and go FHA. We tried adding my mother as a cosigner but her deductions where to high too. Then LO suggested redoing her reverse mortgage and using the cash from that as a down payment but my mom didn't think her house would appraise for enough to help us. Meanwhile, we had a medical issue with our son (he is fine now) and it was just too much to handle all at once so the decision was made to walk away from the house for now and the sellers agreed to return our deposit. I was sad but what could we do.......My mother calls me this morning to tell me that she decided to walk into her bank and apply for a $50k loan and if she is approved she will gift that money to us to use a down payment if the house is still available. SHE IS AWESOME!!!! who knows if it will work out but man am I blessed to have such a great Mommy!
This is exactly why it is so important to provide your tax returns to the LO prior to even getting the pre-approval. It sounds like your original LO was inexperienced or careless. I'm glad you found a LO that knows what he is doing, that will make all the difference in the world for you in the persuit of your new home!
As to your mother providing $50k, that is extremely generous of her. I hope your new loan officer can guide you as to which deductions hurt you the most and its possible you can adjust your tax return for 2012 so you don't have such large deductions so you won't actually need the additional funds. Good luck in the persuit of your new home.
I didnt get the first house I put a contract on, because it need a ton of repairs and the appraisal was low. I was so disappointed because I felt this cute house was the one, the Seller wanted prior approval from each contractor. The stress would of been mind boggling and along what I had to deal with at work I dont think would of made it in one peice.. Well I found the house with the right fit, price, all the appliances aperson could need, and window treatments. I know that perfect house for you will be just around the corner without the worry and stress. Congratulations on your new home.
Thanks for all of the encouragement! After taking a break from home buying for about two weeks, my husband and I decided to start looking at homes in our new APPROVED budget. We are approved for $135k and we have secured a $40k down payment gift from my mother. The home we were under contract for was $185k. So we saw some homes and we liked them....not loved but liked...and then we thought maybe we could try offering the previous sellers $175k. It;s 10k less than our first offer but it's all we could afford and the least they could say is no....Well they said YES!!!! They countered at $178k w/full sellers assist and some conditions. THey want an extra $1k EMD and they are selling as is which is fine because we already had the house inspected. They also want to leave some furniture which we had already agreed to the first time. SO our LO is sending us the loan docs and instructions for a gift letter and proof of funds for the down payment. As soon as all of those docs are in order, we will submit a formal offer and the appraisal will be ordered. God really works in mysterious ways but he is soooooo good!!!!!!