If you did not use a buyer's agent and you negotiated directly with the builder or their representative, you will need to read the fine print in the contract you signed. There should have been a financial contingency addendum. The verbiage within this addendum will declare what happens if you, the buyer, is financially unable to perform. Hopefully, it says that you can walk away without losing your Earnest Money Deposit. If the contract was written by the builder's attorneys, it may not be favorable to you. However, if the builder is a reasonable person, try talking to him/her about the situation. That is, provided you still want to do business with this person. If he is an honorable person, he will probably let you walk away with your Earnest Money Deposit or, perhaps, find a way to get you into the house you want.
Another thing that you can do is to go to a local mortgage lender and ask them if they will give you a Good Faith Estimate. This document will tell you the amount of mortgage that they would approve for you. A local lender might be the bank you do business with, your credit union, or another local bank that has a good reputation in your community.
If this deal falls through, please find a Realtor to represent you as your Buyer's Agent before you start house hunting again. The agent will help you find a good lender first. Then the agent will show you the different choices available in houses that meet your lifestyle, location, and financial criteria. There are many resale and new houses for sale right now and one of them will be right for you. Your agent can help you weigh the pros and cons of each house so that you choose wisely before writing a contract.
Please let me know how this turns out for you. I can feel your disappointment.
Best Wishes, Maria Morton
This should not have happened. Here are a couple blogs about financing.
If you are approved for $190K loan happy to assist you, perhaps locating a home with equity to your benefit or another location. Never work with a builder, seller, listing agent direct unless you have our own realtor.
Contact my office if I can assist
I am sorry for the problem. This is unprofessional at best. I think a good loan officer should have a good idea of if you are going to get approved or not when they take your application. There are differences though. Some are order takers and some are experts. The experts will give you a good idea if you are good, close, iffy, or there's no way you will get a loan. You could try another lender, but I wouldn't expect a $50,000 difference. You could do a couple of things. See if the builder can discount the house. $50,000 is a lot, but maybe they can to get rid of it. Maybe they could give you a deal on another house. Maybe you could put more down payment.
You can get a second opinion, but don't expect the results to be too much different, but you never know
and having satisfied many conditions over years.
In some cases the process of clearing one condition my create several other conditions, however the seasoned Planner will anticipate this too and is prepared to satisfy those conditions as well.
There should be no way to have a $50,000 descrepancy in purchasing ability when your loan officer had "all" required financial documentation well before closing. This should have been determined well before that DEAD LINE>
Please review my profile and if I can be of any assistance to you regaining the purchase of home please email me. With compenstating factors the higher ratios can be mitigated where with a "manual" underwrite you can be approved.
I negotiated directly with the builder's representative and used the buiders mortgate loan. During the approval process, I did not open any credit line and my credit history is great, . I will even put on a 10% down.The loan officer that I have dealt with calculated my income and will be able to pay off the loan
It is just frustrating that they have to informed me about my loan being denied 1 day before closing date.
Is there any possibility that I can be approved with my original loan with another lender?
Thank you again
Ouch! I'm so sorry this has happened to you. According to what you wrote; it sounds like the typical "pre-approval" that some lenders do up front. That usually just includes looking at your credit and taking a snapshot of your income/expenses and assets. Once you are under contract, then that's when they really start turning over all those "financial rocks" for all the information the underwriter will need. That sounds like exactly what happened in your case. Like Naima said, it may be a blessing in disguise as you obviously didn't need to be stuck in mortgage payments that were going to be too high for you.
If you have a Realtor working with you, you may want to consult him/her on how to get the builder to work with you on your new price approval and still get the home. You never know. Best of luck on your endeavors.
I am sorry for the bad news but it could be a blessing in disguise. It's best that you know that now instead of being faced with a monthly mortgage payment that you can't afford.
Yes they should have had at least a doubt if they ran it through the DU. Hopefully you haven't incurred any expenses that you can't recoupe. Go back to the builder and see if they have a home that you like in the 190K range.
Also, did you have a Realtor represent you in your purchase?