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erexa 2015-03-31 10:01 PM

new home cannot close
My sister brought a house from a builder. And now they cannot get a mortgage. They were submitted multiple times by a mortgage broker and got refused by all underwriters. Long story short no ways to get a mortgage at all.

My understanding is they loose both the 50k down payment they paid and the house.

Any other options? There is still 1 month 25 days to the closing but they are in grim mood thinking all is lost.

Please help me my heart feels so much pain for my sister...

erexa 2015-03-31 10:01 PM

House price is 590k if that makes any difference.

Mark & Lynda 2015-03-31 10:30 PM

Did they put in their offer conditional on financing?

GregS 2015-03-31 10:53 PM

Have they talked to their lawyer who was handling the transaction?

erexa 2015-04-01 12:47 AM

No they have not had a condition. I will ask them to consult their lawyer. Not sure if that will help though.

GregS 2015-04-01 08:13 AM

The lawyer will be able to tell them what their options are according to the contract.

Natnice 2015-04-01 09:16 AM

Why is the underwriter refusing them? Credit issues perhaps..
Yes their lawyer has to advise them in this case..

jeffjc 2015-04-01 09:40 AM

why on earth would you buy a house without it being conditional on financing?

GregS 2015-04-01 12:41 PM

You would usually have your financing in order prior to signing the purchase agreement to ensure you can actually afford the purchase.
This is why the lawyer needs to advise.

erexa 2015-04-01 03:22 PM

It is complicated, they both (my sister and her hubby) have good credit ratings (795-805) but the thing is this they bought a new construction a while ago (months if not more than a year), and things for them were going well back in these days, my sister was working in a medical office full time and her husband was a auto mechanic full time.

Now the mechanic shop got closed, and husband is sitting unemployed and waiting for his new business to kick in (he wants to start a CountryStyle Franchise). He was hoping things could have been started already and he would be able to show steady business and income, but things got delayed, CountryStyle has taken some part of money, built up the place, but is still doing something and not actually giving a green light to operate this place (it is inside a gas station near Peterborough).

And now when most of their funds are put into this franchise but the green light is yet to come to open the location and start earning money they have to close the house.

And the worst is Country Style is refusing to provide any ETA when this will be ready, all they are saying is "do not expect to open very soon, this will take some time to finalize". Inspection after inspection at the location, this and that, specialists they sent for measuring this, calculating that, and time does not wait, it flies.

Thus they know this CountryStyle franchise most likely is not going to be before their closing day and they worry they won't be able to close.

And now they are in this grey area of only my sister having a full time job that does not pay enough to get half a million dollar mortgage and even when they have a good credit rating it still does not help, the First National Bank (I think this was the underwriter) declined to land money.

On the question why they would buy a house without condition on financing, first because simply they are builders and sites that do not offer that luxury.

And even if they did which lander would approve me now and give money in 1.5 years without running numbers again? I would love to look at the rate this lander will give me hard approval for 1 or 1.5 year guarantee and non-conditional on re-approval. Maybe 5 year fixed for like 4.5 %, get approved today and lock that rate for 2 years. Yeah nice...

So please do not jump on quickly judging people without knowing the whole story.

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