@Anonymous wrote:
Hello Everyone,
Just writing to express my frustrations and ask for guidance. My wife and I are looking to spend 250k Max and have been pre approved for up to 270k for FHA mortgage. My scores currently at 646, 660, 695 and my wife is at about 695 720 and 750. We currently have about 15k saved for a down payment and our income together is about 90k DTI ratio about 29%. I had a Ch 13 bankruptcy discharged in 2014. I have discovered in the Atlanta metro region that buying a house is extremely competitive. First house, multiple offers situation, we offer $5000 over asking price and offer to pay our own closing costs, we lose the house to someone who came in and paid cash $1000 over asking price. Now, we have found a foreclosure house, offer $7k over asking price and $3000 back in closing costs which would net seller $4k over asking price but have now heard there's other conventional loans and other cash offers. My realtor is acting like anytime there's a conventional or cash offer, we are more than likely going to lose the house because we are an FHA loan even if we're outbidding people and bidding more than the asking price and this is just frustrating to me. This is a bank owned foreclosure so if our offer is $5k over a cash offer or a conventional offer, why wouldn't we win the deal.
Another question I have, first lender we went with was Liberty Mortage said interest rate for us will be about 4.875% but told us we could buy down points for $3514 to get down to 4.0% interest rate. Was doing some shopping around with other lenders and another lender told me this claim was ridiculous and I was given bad information and should not expect to be able to go from 4.875% to 4.0% from spending $3514 to buy down points. Does anything know if this is true or if the new lender is just trying to steal my business away? My wife and I are just getting frustrated because so far everytime we make an offer on a house, either a cash offer or conventional offer less than what we're offering beats out our FHA loan.
Thanks,
Stephen
The likely reason your higher bid is being refused in return for a lower cash bid is because cash comes with fewer/no contingencies. The local market here is also a seller's market. A condo we share a wall with sold last year after being on the market for 6 days at $103,000 over asking price in an all-cash offer. It's not uncommon for a seller to get dozens of offers over asking price, several in the form of cash from an investor wanting to expand his/her rental empire. We visit open-houses where the realtor says 'all offers due by 2:00 on Monday. Contingencies not accepted.'
With conventional loans, there's a bit more leeway to waive things like inspections. Some conventional loans will allow the buyer to basically make a cash bid, and any risk or loss on the home is the responsibility of the buyer. FHA mortgages are a little more protected.
From a seller's perspective, if you could accept an offer of $1,000,000 on your home no questions asked or an offer of $1,050,000 pending an inspection for the bank and a final mortgage approval, either of which allow the buyer to back out, ask you to reduce your price and/or repair damage, which would you take?
