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trickykittyI finally hit a price point at which I can qualify for a conventional loan without having to bug my parents for a co-sign! I will still go FHA if I can, as it's cheaper, but the conventional loan opens up my options of housing just a tiny bit more.
FHA has restrictions on basic health-related livability issues, wherein the seller has to fork over the money to make the repairs, and I am forbidden to offer to pay for said repairs per government "buyer protection" regulations. So, I could find a house for $20k, worth $140k, and that's missing a $200 water heater but otherwise only needs cosmetic upgrading, but since without a water heater the inspector can't perform the water tests and the seller doesn't want to replace it out of fear that it will be stolen again, I can't consider purchasing the sweetest deal known to man over some pertinent $200 missing item.
That missing water heater makes the home unable to qualify for an FHA mortgage, and without the seller willing to pay for it, it will remain that way.
The same would also hold true for a conventional loan, in most cases. The differences between FHA and conventional are very few. Now, if there's something like moldy carpet, but everything else will pass inspection, FHA will say no unless the seller makes the repairs, but as carpet doesn't prevent the regular inspection, that same house might pass for the conventional.
A house that will not pass FHA nor conventional is going to require a cash-paying investor or some other form of non-conventional funding.
So far my top four house choices were 1)having foundation issues, 2)missing at least one A/C unit, and most likely missing the copper out of the second (Yes, I was looking at a house with 2 water heaters and 2 A/C units - it was THAT BIG!), 3)under contract the day I was ready to put in an offer, and 4)missing the water heater, respectively.
3 out of 4 would not have qualified for either FHA nor conventional. At least I'm getting a much better idea of what I want and what I can reasonably expect to get based on the loan criteria I'm facing.
FHA has restrictions on basic health-related livability issues, wherein the seller has to fork over the money to make the repairs, and I am forbidden to offer to pay for said repairs per government "buyer protection" regulations. So, I could find a house for $20k, worth $140k, and that's missing a $200 water heater but otherwise only needs cosmetic upgrading, but since without a water heater the inspector can't perform the water tests and the seller doesn't want to replace it out of fear that it will be stolen again, I can't consider purchasing the sweetest deal known to man over some pertinent $200 missing item.
That missing water heater makes the home unable to qualify for an FHA mortgage, and without the seller willing to pay for it, it will remain that way.
The same would also hold true for a conventional loan, in most cases. The differences between FHA and conventional are very few. Now, if there's something like moldy carpet, but everything else will pass inspection, FHA will say no unless the seller makes the repairs, but as carpet doesn't prevent the regular inspection, that same house might pass for the conventional.
A house that will not pass FHA nor conventional is going to require a cash-paying investor or some other form of non-conventional funding.
So far my top four house choices were 1)having foundation issues, 2)missing at least one A/C unit, and most likely missing the copper out of the second (Yes, I was looking at a house with 2 water heaters and 2 A/C units - it was THAT BIG!), 3)under contract the day I was ready to put in an offer, and 4)missing the water heater, respectively.
3 out of 4 would not have qualified for either FHA nor conventional. At least I'm getting a much better idea of what I want and what I can reasonably expect to get based on the loan criteria I'm facing.
