This is my true story. I am desperately in need of help.
One month ago, my husband and I found a house we both liked. We were scheduled to close on the house on May 27th. It did not happen.
When we first started the loan application, everything looked good. We were approved for the conventional loan. The only condition was all parties must sign contract and all amendments by hands (the lender would not accept digital signatures).
After inspections, we found some repairs were needed. We sent an amendment to the sellers. They agreed to repair item 1 and 2, and gave us 1k for closing cost in lieu of repairs. Instead of typing a clean list of repairs, the sellers used the one we sent them and crossed out the items they were not going to do. We both signed for the changes. We turned in the amendment to my loan processor (LP), who then turned it in to UW.
10 days before closing, everything took a turn.
First, the UW asked for verification of all repairs. Besides the receipts from the sellers' contractors, I also had to hire my inspector to do a re-inspection and comment on each item as "been completed in a workman like manner". This was something new to us, and to both realtors. We finally pushed to get all repairs done and got everything UW asked for.
Next, the appraisal came back 15K lower than contract price. At first the sellers were upset and would not lower the price. We did not want to eat the whole difference either. BTW, the appraisal cost was almost double as other local appraisers would charge. That was one reason we were hesitated to request a new appraisal. Another concern was a new appraisal would took another 7-10 days to complete (the 1st one took 12 days from the LP ordered it to we received it) and we may not close on time. In addition, no one knows what the appraised value would be, it might still be lower than contract price and we would have to negotiate the price anyway. After 3 days of tough negotiation, the seller agreed to lower 5k in price and increase 1.5k in closing cost.
Then the UW updated the condition, in addition to all repairs sellers agreed to do, they asked for a full copy of inspection report to verify any outstanding repairs. If any of the repair work (including what were crossed out on the repair list) are still outstanding, then they will need these either repaired before closing or inspector must specifically comment on them as to whether or not they are cosmetic and whether or not they will affect livability, salability, marketability, structure and foundation. This was 3 days before closing. I have been to the inspection and talked to the inspector. I knew the house is in a good condition (consider it was 17 yeard old and was rental property from day 1). There are some maintenance needs and some issues not updated to current code (those usually can be corrected when it's time to replace). Most repairs are handyman jobs and we can handle ourselves after we buy the house. But the sellers would not pay for any more repairs and would not allow us or our contractors to do any repairs due to liability concerns. So I turned to my inspector for help. He did his best to give a repair assessment with comments on each repair item: the property is considered livable and repair is recommended. It does not affect structure and foundation. I turned this in and held my last hope. One day after the scheduled closing date, the UW sent back an update of condition: Per management all the repairs listed on the inspection report MUST BE COMPLETED and inspector must provide a comment that these have been completed in a workman like Manner. At this time, I gave up (I wish I did this sooner),
My LO blamed my realtor for not paying attention to lender request and should not cross out repair items and mention about inspection report in amendment. My realtor blames my LO for not checking all paperwork and finding out the potential red flags before sending it to lender. She thought my LO should reimburse me for appraisal fee and rate lock fee. No matter whom to blame, we are the ones who lost the most.
Now we have to find another lender and close in 13 business days (the time sellers agreed to extend the contract). Besides my current LO, my realtor and the sellers' realtor also recommended their preferred LO to me. My current Lo offered the best rate (because he screwed up the first time and would do this one at cost); my realtor's LO is very straight forward but her price is thousands of dollars more (and she said she would try her best to close on time); the sellers' realtor's LO is very aggressive and guarantee to close on time, his price is in between the other two, but his guarantee raised some doubts (in today's lending industry, can any one really guarantee to close in 3 weeks?).
Another concern is, if I stay with my current LO, he does not need to pull another credit report (the report would be less than 60 days at closing). IF I go to any other LO, they have to pull a new credit report. When I shopped for rate 5-6 weeks ago, 2 lenders pulled credit reports. The scores were exactly the same: my middle score was 727 and my husband's was 731. If after the new inquire our scores go down to below 720, the rate will be worse. My question is: how does new credit inquiries for mortgage within 45 day affect my FICO score? Should I stay with the current LO to avoid a new inquiry? Is there any other problems I should know (like is it a red flag to start a new loan application when the house contract is one month old)?
I am totally lost in this mortgage nightmare. Sometimes I wonder if I should buy a house. Any suggestion and advice is greatly appreciated.
