To me this is a happy ending. I am glad you have an experienced agent guiding you through a short sale. In my market I shudder when I hear fist time buyers think nothing of a short sale while as a professional I know what is going on but believe to many see a "cheap deal" when they often are anything but. I also feel a pet peeve about buyers unrepresented look here for free advice. Good luck with your transaction!
Perfect. What does your agent say? That is the person who should be able to explain it all to you. I did email you back but must have been caught up in trulia software. My whole point is (I am glad you do have an agent representing you) but what answers does your agent give? That is the person I would turn to. If it is a green agent with little experience then put your questions in writing to agents broker!
It seems like you have a problem answering this question. I wonder why? It reminds me of a person who wants the fish but does not wish to pay the fisherman. Could it be you are a first time buyer with out an agent who is lost in a transaction where all is grey and you can not understand what is going on?
Conventional loans have PMI (private mortgage insurance) which depends on the amount of money you put down. The more you put down, the less you pay, and the PMI cost changes with every 5% down. PMI will go away once you reach 80% equity in your property (and the bank agrees with that - which is a different story...), or you can refinance to get rid of PMI. Any mortgage loan officer will give you a number that you'll have based on your LTV (loan to value) ratio.
However, FHA also has mortgage insurance - called MIP (mortgage insurance premium) which goes on top of your loan, and even if you refi in the next couple of years - you will have to pay back the full amount of MIP premium.
In your contract, you already have what type of financing you'll be applying for - and if you stated conventional, and then changed it to FHA - you'd be in breach of contract. If anything goes wrong with the closing, and this comes out, your escrow money will be on the hook. Even the difference in your loan amount (if changed from your contract) could be a problem, potentially.
Since your short sale is approved already, your starting to negotiate now might cause the bank to cancel your approval, and the bank may or may not entertain your offfer again (but you'll go in the back of the line, starting all over again).
You were lucky, that you are within the "bulls eye" of the bpo value, and got approved.
Actually, if you weren't approved yet, 4K out of the bank's bottom line - their net number - could have turned into a rejection or a counter (higher not lower number) for your offer.
It's great to negotiate, in general - absolutely! In this particular case, when you are approved - you'll be risking your great price and escrow funds, if you try to negotiate.
Verdict: Not worth it.
Hope this helps,
CDPE (Certified Distressed Property Expert)
Beachfront Realty, Inc.
There's no limitations nor new regulations, just their own. Just apply your negotiation skills. Do you have any inspection report that could compensate to request the extra amount? Did you perform all inspections besides your general inspection such as structural, foundation, roof, electrical, arborist, radon gas, asbesto inspections, etc.. ?
Have a blessed transaction,
Conventional doesn't have MI; FHA has MI. It will be most likely the same amount as the MI in many cases is for 2 years; I don't have enough details such as the purchase price offered etc. to be able to advice you properly. I can tell you as a Short sale expert that it's better to take the deal that is approved than taking the risk that the lender may reject it. There are so many buyers waiting for the opportunity that a SS will fall from escrow and they will get it and the lenders and agents are aware of it. In today's market, you are buying in such an advantage of great prices, rate and other terms and conditions that you don't want to miss this opportunity of buying now.
Good luck and close the deal! You'll be happy for a long time...