buying a home, have questions

**bobblehead** · 01-13-2009, 05:00 PM

Hi, I am in the midst of buying a home, a foreclosure, for a great price. It does need a lot of work, but I am very happy, its the tight size, and generally in good shape-- bones wise.

I have a few questions. Regarding my loan, my loan officer at the bank has said that I a 'approved', I sent her the appraisal and credit fee today, now it goes to the 'closing dept'. She said they may call me in the next week or two if they need anything. Does this mean I am not 'approved' yet?? Could anything go wrong?

She locked me in with a rate of 4.62% with me buying 2 points. The bank SELLING the property has agreed to closing costs up to 3000.00 (I paid full listing price), and she said that closing costs would be under this, including the 2 points, and that the selling bank would pay-- does this sound right? I really want those 2 points to bring the interest rate down.

Also, here in the north forclosures are usually winterized. This property was on the market beginning of January. The water was not on, though the heat is on at the house (at 50 degrees). I asked the realtor if they knew how long the heat was on, just to make sure the pipes were ok. They said the water was on to the house, and they would do a freebie for me, and we could check it. The main water valve in the basement appears to be broken (it spins and spins around) and no water. could the valve be broken? Or could the pipe from the street water main to the house be frozen?

The sent me an amendment to sign, saying that selling bank agrees to fix the valve so water can be tested. I have already signed the purchase agreement, and so has the selling bank. I havent yet heard back about this, though, do you think the selling bank will balk at this??

Also, the monthly payments are so low due to the price being low. I agreed with the loan officer today when she locked in my rate to a 15 year loan, but a friend said to take out a 10 year loan, its only $100 more a month, is this smart?

Also, anyone know about required repair of grounding clamp to house side of water meter (electrical)?

Thanks for any and all help. I am learning a whole lot in a short amount of time!!

**clemy** · 01-14-2009, 07:42 AM

Could anything go wrong?

Yes, indeed, and your loan person should have explained that to you. She should have at least explained that you should NOT take on any more debts until after the closing. Many people have gone out and bought furniture, new cars, etc. and found that their loan was not approved because of the new debt.

She should have explained to you that you were probably pre-approved, but the underwriters have the last say as to whether you get the loan.

No reason to change your loan from a 15 to 10-year loan. Just pay the amount you would for the 10 year loan each month. That way, if money gets tight in the future, you will be able to go back to the 15yr amount without any problems. Just make sure you mark the extra amount as going to principle.

As for the amendment about the water, you can try. The bank might say no, after all, they have a signed agreement and no reason to spend any more money on this house.

**donrock** · 01-14-2009, 06:30 PM

It sounds like you're getting a good deal and the previous poster already answered some of your questions. One thing I would suggest would be with that low of a rate I would get as long a time as I could and either pay extra each month or use it to start investing in real estate.
As far as the clamp repair is concerned there should be a rod of some sort of rod already in the ground with a wire going to it and clamped onto the rod. Should be an easy repair.
Good luck, but hopefully you won't need it.
donrock

**jamesww** · 01-14-2009, 07:16 PM

There exists a wide range of things that can go wrong during these times like lenders folding before you get your loan funded. The appraisal could get flagged and tie everythign up. Just take some of the widom given about not taking out any new loans or spending larger sums of money from your bank accounts. In other words do not allow your accounts to dip significantly below where they were when you first applied and do not add any debt. Bring in anything your asked for immediately and it should be just fine unless another lender fails. You can not do anything about this so dont sweat it. I know easier said then done.

So, it sounds as though closing costs should be covered but pre-paids may or may not be payed. You might have to bring in money for things like taxes and insurance. I would check with your L.O. to confirm this so you do not have any suprises.

It could of course be either and the only way to know is to fix the valve. Have them fix the value or put out the littl bit of money to ease your concerns.

They may or they may not it depends on how many properties they have on the market, whether your area is a declining area, and whether or not they had other offers. it takes time on these manners for the paper work to get in front of the right people.

It is never smart to increase your required out lays when you can easily pay more on the principal as time goes on at your own leisure.

The grounding issue is not difficult to take care of as another poster has mentioned but it is very important that it gets done as the way it is now is not safe.

**RE_Investor** · 01-15-2009, 07:59 PM

It sounds like a pretty solid deal. Make sure you are able to get the water tested before closing, but it sounds like you are on that already.

As mentioned before, a pre-approval is not a guarantee, issues can come up in underwriting. And it is not always something to do with the borrower, sometimes there can be an issue with the house, or even the appraisal.

In most cases, as long as nothing major has changed, you will be all right.

**bonhamsurf** · 01-16-2009, 09:25 AM

I agree, a pre-approval is nothing but a formality stating the buyer and the lender have talked. Your mortgage broker should be your friend, and work very closely to help you in all aspects of the purchasing process. (say that 10 times real fast).