Loan approval "with conditions"

[Ritterskoop]

My mortgage has been approved with conditions, to buy the condo downstairs.

My research suggestions that "conditions" tend to be repetitions of things I've already provided: W-2s, paystubs from both jobs, like that.

Does anyone know any different?

[mrkelley23]

The only time I have had a mortgage with conditions, the condition was that I buy mortgage insurance, which added about 5% to my payment monthly, IIRC. That was our first house, though. I understand mortgage insurance is pretty routine for first timers.

[SportsFan68]

They might lend you only the amount of the appraisal; that might be a condition. I can't think of anything else for a residence downstairs from you. Surely you would know about any structural faults, bad plumbing or electric -- stuff like that.

[Bob Juch]

My mortgage has been approved with conditions, to buy the condo downstairs.

My research suggestions that "conditions" tend to be repetitions of things I've already provided: W-2s, paystubs from both jobs, like that.

Does anyone know any different?

The lender.

[jaybee]

I too, was thinking PMI. Depending on your income to debt ratio or if you are financing a high percentage of the appraised value (usually over 80%) then then may require PMI. Avoid it if you can as it's just an extra expense. Also, it doesn't automatically stop once you pay down past 80%, you have to keep up with things to get it cancelled.

Other than that it would be the usual - verification of income etc.

[Ritterskoop]

I'm putting down 20% (borrowed from my 401(k)) to avoid PMI, and I paid a good bit for an inspection. The only thing outstanding that I'm aware of is that the bank is arranging the appraisal.

[kayrharris]

Not having seen the paperwork, it could just be the appraisal they're waiting on. Missy has a lot of sales that await final loan approval on the property appraisal.

Great help, huh? I think you'll be fine. Good luck!

kay

[Ritterskoop]

Not having seen the paperwork, it could just be the appraisal they're waiting on. Missy has a lot of sales that await final loan approval on the property appraisal.

Great help, huh? I think you'll be fine. Good luck!

kay

That was a big help. I am not worried either way. It goes through or it doesn't. I've done all I can and if it's not time, it's not time.

I don't know why they waited until now to do the appraisal, but I guess they don't want to waste the effort/money if other stuff isn't up to par.

[Bob78164]

I'm putting down 20% (borrowed from my 401(k)) to avoid PMI . . . .

Gak! Aren't you in an industry where job security is rather less than ideal? I ask because the way most plans work, if you are separated from employment for any reason, you have only a rather short amount of time to repay the loan in full (I think 90 days is typical), and if you don't or can't the unpaid principal is treated as a premature distribution, and therefore is subject to taxes and penalties.

The other problem is that you'll be subjecting yourself to double taxation. You'll be repaying the loan with after-tax dollars, and then when the principal and interest eventually come out of the 401(k), the money will again be taxed as ordinary income.

I'm all for avoiding PMI, but that's a chance I don't think I'd take to accomplish that goal and PMI may well be cheaper than your alternative. When we bought, we used an 80-10-10 structure to avoid PMI. --Bob

[kusch]

My mortgage has been approved with conditions, to buy the condo downstairs.

My research suggestions that "conditions" tend to be repetitions of things I've already provided: W-2s, paystubs from both jobs, like that.

Does anyone know any different?

My 2 pennies. I would think what information you have provided allowed them to "pre-approve" you for an XXXXX amount of loan, subject to other "conditions" such as an appraisal for xxx amount, clear title, proof of hazard and/or flood insurance, condo bylaws being ok with acceptable restrictive covenants, homeowner association bylaws (if there is an HOA-prolly not), expiration date of loan commitment and reconfirm financial info if needed. There could be other conditions that we are unaware of at this time.

Just curious, will this be owner occupied or an investment property? You say downstairs, is this a 4 unit condo--again just curious?

Skoop, as you may know I have season tickets for the Vikings this year and they play your Kitty Cats again. Too late in the year for me to freeze my a** off so I am not going. PM me if you have an interest in the tickets.

[Ritterskoop]

Thanks everyone for your contributions, the ones that were helpful, which was all but one.

BobNumbers, the 401(k) thing is done, so there it is. Yes, I'm in an industry where job security sucks, but within that circle, I have excellent job security, if that makes any sense. I've proven I can learn anything and am willing to do many tasks, so if and when we go under, I'll be the one turning out the lights. But we won't go under online anytime soon if ever, and we spend more and more of our workdays on the online products. I think five years is safe enough to pay this off. And I could get a job in a sports information office or academic advising at a college pretty quickly if needed. Tons of colleges around here.

Kusch, I will pass on the tix but thanks for the offer. Especially if the sale goes through but either way, I need to hunker down for a bit and pay off this summer's baseball travels. I have one short trip in late November for a half-marathon but that's it.

The condo: It's a 4-unit building in a group of 160 units built as apartments in the 60s. They went condo in the 80s. I've lived here for 20 years as a renter with my friend, so one of the conditions they may be wanting to clear up is the notion that I've paid rent in cash for so long. I gather other conditions are just that they like to confirm stuff that was true two months ago when we started. One loan person on a forum said he calls your employer five minutes before the closing to make sure you still work there!

I've spoken with the HOA management company and my insurance agent so all that stuff should be clear. My intention is to take possession, though we won't move downstairs for some time. Roomie is someday going to be old enough to where he doesn't need to go up and down those stairs every day, but for now it seems to be keeping him young. I'll set up an exercise room and an office for schoolwork at first, then gradually see where it goes. I don't even want to to change my mailing address but I guess I'll get mail at both places for some time, which is fine. We know the postal carrier fairly well and will explain things to her if there's any need.

I am 47 and think it's time I own something besides a 15-year-old car, is part of what's going on. No rush, though.

[Bob78164]

BobNumbers, the 401(k) thing is done, so there it is.

You might look into alternative ways of laying hands on that kind of cash. If they're available to you, I'd consider using them and paying off the 401(k) loan immediately. And even if you don't want to do that, you'll have a backup plan in case the lights go off too soon and you're suddenly faced with a 90-day repayment obligation.

Good luck on the purchase. --Bob

[Ritterskoop]

We are within a day or two of closing.

The conditions were not anything I hadn't already done - it meant a new bank person has been more involved but it has still been all the same little stuff: copies of things, more signatures, some paperwork from the homeowners association management company about how many rentals are in our complex, like that.

The appraisal came in under my offer but not too much so I will make up the difference in cash. I was told at one point it was $4500 under, but it turned out to be less than $1500. It is a fair appraisal, based on my research of the neighborhood's sales over the past year. I want that specific unit, is why I offered a little more.

So. Either Thursday night or Saturday afternoon, we will close, if all goes well.

[christie1111]

Yay!

[kayrharris]

Good news!

kay

[mellytu74]

WOOOO HOOO!!!!

[Ritterskoop]

We closed Oct. 29, four months after I made my offer. I had no idea it would take that long, though 95% of the delays were the seller, who needs a week to do anything you and I can do in an hour.

I wrote a check for $24,000 and some, which was pretty durn cool. That was the down payment and other odds and ends.

I got my first pieces of mail at the new address today, though the postal carrier is cool and put it in my same old box.

I am paying off the down payment through my 401(k) for five years - probably sooner when I can make extra payments. Then I will start putting more into the mortgage payment and hope to have it paid off well early.

For the money people:

Offer was $101,500
Appraisal came in at $100,012 so I made up the difference
Financed right at $80,000 at 4.375%
Payment is $400/month plus $100/month for taxes & insurance, which I wish I could handle myself but I guess that's the industry standard
HOA fee is $157/month, which I do get to handle on my own. Plus there was a special assessment of $4600 due Sept. 1 for the new roofing project, which I am paying in cash.

But then it will be time to hunker down and pay off all this stuff. Good thing next summer's baseball is the 8-team very local Carolina League.

[MarleysGh0st]

Congratulations!

Appraisal came in at $100,012

Seriously? That's sounds awfully specific.

So did you count how many times you had to sign your name during the closing?

[kusch]

We closed Oct. 29, four months after I made my offer. I had no idea it would take that long, though 95% of the delays were the seller, who needs a week to do anything you and I can do in an hour.

I wrote a check for $24,000 and some, which was pretty durn cool. That was the down payment and other odds and ends.

I got my first pieces of mail at the new address today, though the postal carrier is cool and put it in my same old box.

I am paying off the down payment through my 401(k) for five years - probably sooner when I can make extra payments. Then I will start putting more into the mortgage payment and hope to have it paid off well early.

For the money people:

Offer was $101,500
Appraisal came in at $100,012 so I made up the difference
Financed right at $80,000 at 4.375%
Payment is $400/month plus $100/month for taxes & insurance, which I wish I could handle myself but I guess that's the industry standard
HOA fee is $157/month, which I do get to handle on my own. Plus there was a special assessment of $4600 due Sept. 1 for the new roofing project, which I am paying in cash.

But then it will be time to hunker down and pay off all this stuff. Good thing next summer's baseball is the 8-team very local Carolina League.

Congrats!!!!

You can thank Dodd-Frank, Richard Corday and the CFPB for some of the delay, costs and hoops you have to go through today. They really have not made it easier for consumers.

Like Marley that appraisal # makes no sense. I would like to know why it is worth an extra $12.00. Even the 100,100 instead of 100,000 bugs me. It is a personal thing.

[macrae1234]

Like Marley that appraisal # makes no sense. I would like to know why it is worth an extra $12.00

It was for the bottle of Chardonnay in the fridge.

[Ritterskoop]

I think they use the recent sales in the area to get most of the number, so it is probably an average.

I think I signed about 15 times that day. Had to remember to use Eleanor instead of Ellyn.

[mellytu74]

Congrats, Eleanor!

[Beebs52]

Congrats, Skoop!!! Welcome to the money pit! You'll love it, really.