Congratulations that you CAN get a mortgage!!!! You ARE in the Drivers Seat in this "Buyers Market", however, some sellers are their own worst enemy.
As you know the economy has changed a lot of the way we used to do business. This has hit the real estate market very hard.
Yes, the seller can ASK for these things, however, a buyer can refuse and may be rejected.
Both parties loose. The seller may have unrealstic expectations of buyers and thus may not be able to sell for the terms they want. Buyers need to be prepared to walk away if they do not want to disclose all of the requests.
Is this "normal" now you ask?
Sellers are often asking for higher down payments now to reduce the chances of a buyer being unable to get their mortgage and therefore the seller loosing marketing time.
Usually a pre-approval letter stating what has been reviewed: Credit Score; Employment history; Funds to Close are acceptable to show the seller that in the eyes of the lender you meet their tough requirements.
Ask you lender to re-write the pre-approval with these statements including, in your case, that the lender has also reviewed your ability to get PMI. Then re-submit the offer, using a "Buyers Agent", demonstrating your position: nothing to sell; pre-approval in hand; can meet the sellers terms to close. If you can make the mortgage commitment a shorter time frame the sellers may feel better.
If they still say NO and request other information then you can decide if you wish to go forward.
There are other homes out there to choose from and it is a "Buyers Market".
Always be willing to walk away. If you can get a mortgage then You are in the Drivers Seat more than you know.
Getting back to the disclosure. What I make sure my clients receive with an offer are:
1) Letter of Bank pre-approval.
2) Credit check with FICO score.
3) proof of income (last years' Fed return, first two pages only).
4) proof os assets (current Bank statement).
I do my own type of pre-qualification after receiving these documents. I prefer a customer with a 28% DTI ratio. Anything more could be a problem down the road.
Brokers will have their own criteria but any offer must be presented to a seller from their broker. This is required by law. Even without all documents, the offer should be submitted.
If I receive an offer verbally, I submit it but I caution my clients to consider it pending review of financial documents. This way I make sure my client receives the offer and I counsel them to wait for all financial documents before making any decision. Good luck.
Welcome to the 'brave new world' of finance. It's actually not so new. Years ago 20 percent was the norm. The market was much more stable. People had 'skin in the game'. If you have a pre-approval for the mortgage and PMI that should be adequate unless the seller has given specific instructions to see your financial's. You mentioned that the seller has requested 20 percent down to make sure the deal goes through. If you can't comply with that then I suggest that you move on. The seller also has the right to impose conditions to make him/her feel more secure about the transaction. It is in fact more difficult to purchase a coop for 10 percent down even if you have a pre-approval. It may not be worth the paper it's printed on, who knows! Check the boards requirements also. They may want 20 percent down too. It's very frustrating for everyone right now. You may want to try for a condo. There generally is no board approval necessary but the agent and seller may make the same requests. Good luck, show some flexibility if you can. I am available to help if you need it. I cover Queens and Nassau Counties.
Century21 Yve R. E.
Licensed R. E. Agent
NYS Certified Residential Appraiser.
paperwork,lawers,banks and appraisals that need
to paid. Only be told after all that work that the deal
would not be able to close. If your agent dose his/her
job right you will have a smoother transaction. I know
that some of the questions seem to be a little to much
but,its for the best out come.
Licensed Real Estate Agent
Century Homes Realty Group
Direct Line: 347-932-0609