Got an FHA Approved Loan for a Home. Found A Bank Owned - ?

We put an offer in on a home a couple weeks ago for a bank owned home. We bid higher so the bank accepted our offer. Now, we got approved already for an FHA Loan, the house we want is a lot less than the loan amount we got approved for. When will we know when to give notice to our apartments? And that everything will be ok that we actually got the house?

Update:

can something go wrong with the deal? can FHA decide not to loan to us? Or Something?

7 Answers

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  • TK
    Lv 7
    1 decade ago
    Best Answer

    The FHA can refuse to lend if its own real estate appraisal is severely at odds with the price you negotiated. They can also refuse if your credit history has been adversely affected in the interim, or if you or the co-applicant have experienced a significant change in your employment status including, most notably, a change in the income you expect to earn in 2009.

    About 50% of the deals I have been peripherally involved with in 2008 have failed because of appraisals that place the real estate value much lower than the P&S Agreement, borrower's employment/income instability, or levels of credit card and other debt that the borrower cannot pay down substantially prior to a closing.

    Don't give your notice until you have an acceptable final loan commitment in your hands. A preliminary loan commitment is not the same as a final loan commitment.

    Good luck.

  • 1 decade ago

    Don't do anything until you have the place inspected OR until the FHA appraiser gives you the list of needed repairs. Here's the glitch...IF you don't have the $ to do the repairs to get the home up to FHA standards....then you lose the money you have spent on inspections & appraiser fees.

    What the bank fails to tell people is this:

    ~There is a difference between what the FHA appraisal is all about (its a VISUAL INSPECTION), & the actual home inspection (a HANDS-ON testing of all systems in the home).

    ~Then there's the extra fee & whammy of the TERMITE INSPECTION....which can put the skids on an FHA LOAN OR add thousands to the move-in price of the property.

    IN OTHER WORDS>>>>IF YOU DON'T KNOW HOW TO SPOT A BAD HOUSE OVER A GOOD HOUSE (structurally & otherwise),...you will end up depressed, angry & broke. Work with a reputable & experienced agent/friend BEFORE you start paying all those fees for the other party to keep & leave you penniless & without a home. FHA IS TRICKY & PRECISE IN THEIR GUIDELINES & THEY WILL NOT WAIVER. It's their money & they call the shots.

    *Edit: We were given a closing date of Dec 15 & we are still awaiting the final date. This whole thing was a crap shoot & we know it will turn out to be good...yet, it's not anything I'd ever care to repeat in the same manner on a 2nd time around with FHA.

    Source(s): Still waiting for escrow to close on a repo home. It's a long & messy process that cannot be done in 30 days. Generally it's 45 or more & more & more & more. Look for homes that are listed as FIRST TIME BUYER HOMES...this generall means that are up to FHA standards, or very close to perfection of the FHA guidelines.
  • godged
    Lv 7
    1 decade ago

    There is a bunch of things that can go wrong. For instance, your bad credit may snag this transaction at underwriting. Hopefully your significant others credit is great or his income is good enough to get the loan without you. But if your income is needed to qualify for this house, your credit (which you described in another question as "shitty") will be a factor.

    As Acermill likes to say, he can get a ham and cheese sandwich a pre-qualified, what would have been better is a pre-approval.

    If you have contingencies which need to be satisfied, these could be potential problems also.

    When your loan package gets through underwriting, that is when you can take a deep breath. But this typically doesn't occur until a few days before closing, so this won't give you 30 days notice for your apartment.

    Source(s): Oregon Realtor
  • Anonymous
    1 decade ago

    There is always the risk that something can go wrong - appraisal, property inspection, title search or the lender just changing it's mind. Keep in close touch withe the escrow process through your realtor.

    (FHA doesn't lend - the lender does. FHA just insures the loan).

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  • 1 decade ago

    Yes, something went MAJORLY wrong.

    No one bids higher than the asking price for a foreclosure...no one...not in this market and it's not a smart financial decision.

    The deal will eventually fall through b/c the home will most likely not appraise.

    I didn't mention having a Realtor..I would HIGHLY caution you to get one in the future...buying a home is not a do it yourself project for a first time buyer and you will not get a SINGLE PENNY of a discount for not using a Realtor...so why not get the representation?

  • 1 decade ago

    it can take up to 30days, sometimes you get the notice in about 2weeks however, there is a lot of paperwork to be done........ALOT, so you have to complete all that to have it finalized. The timing also varies on how fast the real estate agent closes the deal, how much he or she pushes to close it and then you do your part to sign off all the lengthy contracts.

    Source(s): Personal experiance from last year
  • 1 decade ago

    give notice now as you should be able to move next month. Get with your loan officer and ask when they expect to close

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