Got preapproval, found house, now bank won't loan $
OhioGuy
ago, we found a house that met our needs. (4 bedrooms, 2 bathrooms, an acre+
of land, in a location we liked, and unincorporated) It even had a second
structure on the property that used to be a hair salon, which we thought
would make a nice storage shed, or home office. It was bank owned, and bank
was asking $65K. Probably needed about $10k to $15k in repairs. Long story
short: it had failed to sell, and went to auction. We were outbid at
auction, because somebody else bid $60k, and we stopped at $59k. So we
forgot about it.
Last week, the real estate agent called and told us that the auction deal
fell though - purchasers were unable to complete the deal, so the house was
back on the market. We had recently redone our preapproval through a local
company affiliated with Wells Fargo, and were approved up to $120k. Bank is
now asking $59,900 for the place. Funny thing is, we recently signed our
oldest son up to attend kindergarten at a grade school only 1 mile from this
place, to get him in a better school district. If we could get it, I'd be
able to put in some work on it after dropping him off at school.
Anyway, the rep at the mortgage company asked me some questions, and when
I said we'd like to put in an offer, she told me that the zoning could be an
issue. I had noticed that the property was zoned B-2, business. The larger
structure is single family, a house built in 1900. If you zoom WAY in on
the auditor's website, it has the word "residential" right on top of this
house. It is evidently considered a "non conforming" structure, since it is
residential, and does not fit the business zoning.
I contacted the county zoning and planning folks, and was told that I
could either, A) buy it and use the house for our family, and get a simple
certificate if I wanted to use the smaller structure as a business or
B) I could get the place rezoned as residential without very much trouble.
It would take 3 months and a few hundred dollars
The mortgage rep contacted Wells Fargo, but they told me they could not
provide a loan for us to get this property. The main argument was that due
to the current zoning, if the "non conforming" house was damaged more than
50%, we would not be allowed to rebuild it. Evidently this is because over
time, they want the property to be fully a business zone there, since that
is what the zoning is.
I'm not sure why this is really an issue, since the zoning folks told us
it would be a simple manner to either use it as is currently, or else rezone
it residential. Plus, wouldn't the insurance on the place cover the
mortgage if an tornado or file screwed up the place? The land itself is
probably worth $25k to $30k, because it is a nice location at an
intersection with decent traffic, and would probably be a good place
eventually for a Dairy Queen, Subway, or whatever. There are lots of $150k
to $250k houses going in just to the north, and most of the surrounding area
is agricultural fields.
I'm wondering if there is another way we need to be going about this. We
were planning on getting an FHA 203k rehab loan, and rolling the repairs
into the loan. We have about $6k of our own $ to put towards the loan.
Total cost of the property is about 10x that. Anyone have any suggestions?
My wife would truly love it if we could somehow get this place. Her
commute would be only about 14 minutes, and would be along the most scenic
limited access highway in the area. Plus, she'd be facing away from the sun
in the morning, and away from it again in the evening. We would live in the
are where our son is already going to be going to school, so I would no
longer have to drive him to and fro - the bus could pick him up.
If anyone has any thoughts that might help us figure out how to get around
the apparent hurdles here, we would really appreciate it. We are tired of
looking, thought we had financing lined up, and THOUGHT we finally had a
nice place to get with the financing that has, evidently, evaporated.
Thanks!
Al
First, you never had any approval of any kind from the bank to buy non-
conforming property. Read your documents closer. The reason the
auction buyer's deal fell through is likely the same problem you have
now. Forget about what people at zoning tell you about how easy is is
to rezone. It may or may not be that easy. Maybe you can make a deal
based on the contingency of getting it rezoned. I see foreclosed
property around here that is routinely rezoned BEFORE an auction or
sale to remove the conflict. Something is wrong with this deal. And
again, you are at the mercy of others because you don't have money of
your own. When you use other people's money, you play by their rules.
If all you have is $6,000 to put down, you have nothing. Of course,
those following your situation are well aware that you refuse to sell
the other property that is losing value and may lose more when you
become the landlord you hope to be into retirement some eons away.
Gary Heston
> My wife and I have been house hunting for about a year. [ ... ]
> Last week, the real estate agent called and told us that the auction deal
>fell though - purchasers were unable to complete the deal, so the house was
>back on the market. We had recently redone our preapproval through a local
>company affiliated with Wells Fargo, and were approved up to $120k. Bank is
>now asking $59,900 for the place. Funny thing is, we recently signed our
>oldest son up to attend kindergarten at a grade school only 1 mile from this
>place, to get him in a better school district. If we could get it, I'd be
>able to put in some work on it after dropping him off at school.
[ ... ]
> I contacted the county zoning and planning folks, and was told that I
>could either, A) buy it and use the house for our family, and get a simple
>certificate if I wanted to use the smaller structure as a business or
>B) I could get the place rezoned as residential without very much trouble.
>It would take 3 months and a few hundred dollars
[ ... ]
Apply for a mortgage with the bank wanting to sell the property, and
proceed with the zoning change--or make it contingent on the zoning
change being approved.
Gary
--
Gary Heston ghe...@hiwaay.net http://www.thebreastcancersite.com/
Life has its' ups and downs. Prepare for the downs during the ups.
Bill
well.
Explain the situation. With smaller banks, they would have access to a bank
big shot who could say ok.
With larger banks, then can't bend rules, etc.
And who is selling the property? Perhaps they would carry the mortgage?
Might ask...
Al
One would think OG is smart enough to figure these things out without
asking here. Trouble is, there are likely other things he's not
telling of this story of woe and intrigue. He wants to put $6K down on
a property that needs $15K in work and he won't be living there any
time soon. Banks shy away from such absentee ownership and
uninhabitable property with so little investment. They don't want to
get stuck twice on the same property. Just a guess. He might have
tried the owning bank and they told him to pound sand.
ChairMan
Al <albu...@mailinator.com>spewed forth:
Not to mention that if he is working with a realtor, he/she would know best
who to go to for this situation or would at least know of a broker that
could find a lender. Like you said, I think there are some aspects not
divulged here<as usual w/OG>
Gordon
> My wife and I have been house hunting for about a year. Perhaps 6
> months ago, we found a house that met our needs. (4 bedrooms, 2
> bathrooms, an acre+ of land, in a location we liked, and
> unincorporated)
>> and to summerize, they can't get a bank to finace the deal <<
So go to the bank of Mom and Dad.
If your parents have a large nest egg saved up for
retirement, they are not getting much more that 2%
intrest on their money (based on current CD rates).
You can pay them 4.26% (IRS guidelines). It would
be a win/win situation. You get a better intrest rate
and they get a higher return and a monthly income
thanks to your monthly mortgage payment.
Bill
>
> One would think OG is smart enough to figure these things out without
>
Actually I've noticed a trend on the internet lately, and that is quite a
few people need to be told to "try another bank", "go elsewhere", or in the
case of how something should operate, to "read the instruction manual which
came with the product". (Basic things.)
One person was advised to call businesses listed in the yellow pages to find
companies which could do the work that person needed to have done, but the
person didn't want to call because some businesses might think he was asking
dumb questions and would be "short" with him. (Well find a business which
gives helpful advice!)
Then it is common on automotive forums lately for people to say they have x
amount of dollars available to spend on adding accessories to their new
vehicle and asking other people what they should buy with this money!
Total sheep mentality.
Al
There was a discussion between Malcolm Forbes SR. and Bill Gates on
what makes a person successful. Mr. Forbes' view was that success had
little to do with intelligence or even education in many cases. He
said it had more to do with energy and focusing that energy on a
useful purpose. I'd like to hear that again on a PBS special.
OG views the new groups as his personal shopper, whether he's looking
for potato chips at so much per ounce or wanting to barter or beg 6-7
pepper seeds through the mail. Despite the criticism he has endured
here and in other groups (using various names), he's still willing to
come back for more. So in that limited sense, maybe he has the energy
Mr. Forbes was speaking about.
Zuke
I find Ohio Guys posts a lot of fun. He is actually trying to be
frugal which is the name of the group. He doesn't get combative when
he comes under attack.
Having recently been through the house hunting experience with
problems--the bank said the house was going to fall down a hill
I can identify with his problems here.
Dennis
wrote:
I once knew a guy who was always looking for an angle. He wasn't
happy unless he thought he was "gaming the system", often spending
more time and resources looking for a backdoor "sweet deal" than
following a more common straight-forward path would demand.
OG sometimes reminds me of that guy.
Dennis (evil)
--
The honest man is the one who realizes that he cannot
consume more, in his lifetime, than he produces.
Al
> On Sat, 15 Aug 2009 13:59:10 -0700 (PDT), Al <albun...@mailinator.com>
You nailed it precisely Dennis. OG is a gamer on another site. As Tom
and Ray, the Car Talk guys, say, the man who tries to save the most,
spends the most. It's somewhat like gambling. It's more about being in
the game than winning.
George
I think we knew the same guy and thats also the same impression I get.
Lou
news:33hg855r7t6bh2ri2...@4ax.com...
>
> I once knew a guy who was always looking for an angle. He wasn't
> happy unless he thought he was "gaming the system", often spending
> more time and resources looking for a backdoor "sweet deal" than
> following a more common straight-forward path would demand.
Like Ralph Kramden on The Honeymooners.
Sad to say, my daughter is like that. Her first husband (poor guy died of
cancer many years ago) was like that in spades - they reinforced each other.
> OG sometimes reminds me of that guy.
That isn't my primary impression, but there may be some truth to it.
Rod Speed
Tell the realtor that you will buy it when they get it rezoned
because you cant borrow for it with the current zoning.
See if any other lender is prepared to lend on that property.
OhioGuy
>which is the name of the group. He doesn't >get combative when he comes
>under attack.
Thanks! I've always thought of Usenet as a helpful place to post
questions and share answers - sort of like a virtual bulletin board. Most
of the groups I subscribe to are hobbies of mine - gardening, etc. I post
answers to other folks' questions when I have one, and my own questions from
time to time. I usually post questions only AFTER my own search, when I've
come up with nothing useful on my own.
You would be AMAZED at how much $ and time I've saved over the years just
by asking people more experienced than myself. I have a fair amount of
experience when it comes to entomology, testing computer hard drives,
writing and plumbing. With everything else, I certainly don't mind another
opinion.
>experience with problems--the bank said the house was >going to fall down a
>hill
Woah - seriously?
In the case of the property we were looking at, it was in a perfect
location for us, and we did like it. However, the listing did not reveal
that it was zoned business, nor did the listing say anything about it being
a non-conforming structure. We were approved for double the purchase price,
so I thought it would be easy for us to acquire. Turns out, the
non-conforming issue is what has kept it on the market so long. Every
single bank or credit union I've called says they will not provide financing
on such a property, mostly because they can't resell the mortgage, but also
because of the increased risk they would be taking. I don't think the bank
will find a buyer until someone can pay cash for the property.
Yesterday, I even had the real estate agent ask the bank which owns the
property if there might be some way for us to get finacing through THEM to
take the property off of their hands. They declined.
We COULD get a home equity loan on our current house of around $40k, but
even with our savings, that would leave us about $11k short in being able to
pay them the cash they want. Plus, it would then be a 15 year loan, and
require us to pay much more per month than a typical 30 year fixed rate
mortgage.
Rod Speed
Why cant they just get it rezoned if it really is as easy as the city admin claims ?
> Yesterday, I even had the real estate agent ask the bank which owns the property if there might be some way for us to
> get finacing
> through THEM to take the property off of their hands. They declined.
> We COULD get a home equity loan on our current house of around $40k, but even with our savings, that would leave us
> about $11k short in being able to pay them the cash they want.
Maybe they will eventually decide to accept that much
of a lower price when it never does move with such a
massive overhang of mortgage defaults on the market.
> Plus, it would then be a 15 year loan, and require us to pay much more per month than a typical 30 year fixed rate
> mortgage.
You should be able to fix that by getting it rezoned
once you own it and them refinancing it then.
I'd personally check that it can be rezoned as easily as you were previously told,
then get the mortgage on the current place, put the $11K on the cards, get it
rezoned and refinanced as quickly as possible, since it does seem to suit you so well.
Rod Speed
Can you post the url to the auditor's web site for the property ? By email if you dont
want to do that publicly. the email works even tho it looks like its munged, its not.
OhioGuy
>admin claims ?
Good question. It turns out that it CAN be rezoned, but the current owner
(bank) is unwilling to go through the time, and pay the fee to do so.
Evidently they (as well as we) think there is more value in the property
long term zoned business. (I've had thoughts of doing something out of the
smaller structure)
Also, from what I've been told, it may be a lot easier to get business
rezoned as residential than it is to get residential rezoned as business.