I admire my clients. They find the perfect home – or so they think, and then are driven to close the deal regardless of financing roadblocks that surface. Sometimes, though, they don’t see the forest for the trees.
Typically, there are relatively simple solutions to resolve issues. For example, if a lender requires a borrower to evidence timely rental payments via cancelled checks (but in some months cash was paid), the landlord can confirm this with a signed Verification of Rent (VOR) form.
But when several solutions are required, stretching is likely not the best answer. I’m all for rolling up the sleeves and making it work, but there is a point when you need to walk away so that either your economics are more comfortable or you truly know your Seller’s bottom line.
Having some of these example issues should give you pause:
Debt-To-Income Ratio Too High
>Restructure Vehicle Loan to Reduce Overall Monthly Payments
Low Appraised Value & Seller Is Price Inflexible
>Obtain Gift Funds to Cover New Equity Required
Higher Gift Funds Introduces Risk to Lender
>Evidence More Cash Reserves in Bank Account
Uneconomical Homeowners Insurance Costs
>Change from Replacement Cost Coverage to Actual Cash Value
There is Asbestos in the Siding & Ceiling Tiles
>Accept the Fact that Fibers Are Not Airborne Unless Disturbed
Dry Rot and a Ceiling Leak
>Seller to Set Aside Sufficient Repair Reserves
Remember: Your best solution may very well be to find another property!
Here’s the Point: Don’t fall in love with your real estate purchase until you are Cleared-To-Close, because your judgment might be clouded.