Can I back out of 1st time buyer real estate purchase?

Question

i was quoted a mortgage rate and received paperwork from lender
stating all terms and interest rate..no problem there..

however, the seller changed the closing date several times and will be past the 45 day rate / terms lock in date ...i will be closing this coming wednesday on my first home purchase and my lender just informed me that they ran my credit reports again and that there was a significant change that will affect my interest rate....they pulled experian, trans union and equifax....somehow within the last 45 days since it was previously pulled my equifax file split and with the exception of some recently obtained credit cards, everything else going back to 1992 has disappeared off equifax lowering my equifax fico score from 680 to 610....

is there anyway i can back out of the deal which was contingent on financing? because of the equifax split file, which will take time to correct, my monthly payment will be going from 875.00 a month to 1150.00 a month.....

i just pulled my equifax credit report and it is missing most of my open credit lines and just shows a couple of recent credit cards and none of my other older and still open credit lines, it has definately become a split file....

the lender is not saying that they will not give me the loan, they are stating that as the result of my credit scores changing significantly, they are changing the rate.

Answer 1

check with a different mortgage company, maybe they are ripping you off
threaten them with going to another mortgage company for another rate and call around, let them know what you were quoted and see if they can do better...shop around
sometimes mortgage companies pull this at the last minute, knowing that you won't have much choice unless you do your homework
I have seen it happen before...

Answer 2

Check your contract...often (as in Maine) there is a section under financing which states the terms which would be acceptble to you as a buyer which should read something like this: to a ____(conventional, HUD, Private, etc.) loan of ____(%) ____
of the purchase price at a rate not to exceed ___(%)_____.

If you have an interest rate higher than the rate stated on the purchase and sales contract, then you may be able to walk with a FULL refund of your earnest money deposit. You would need a letter from your lender which states the rate and term that the lender would be willing to loan at, which is commonly known as the "committment letter".

Good luck. Hope you have an agent and an attorney. If you do decide to go ahead and close the loan, all is NOT lost...if you keep your nose clean, you can expect to refinance at a better rate in 6-12 months, and still get your house. You will have the higher payment for a time, but that's the price for credit score changes.

In addition, you MAY have an "out" if you have exceeded the time allowed in your contract for closing, and HAVE NOT signed an extension. Definately have your purchase and sale agreement handy when you speak with your agent/attorney.

Good luck.

Answer 3

Depends upon law in your state. Usually, you will lose the earnest money that you put down on the contract for sale, if you have no valid reason for backing out. However you state that seller changed closing date several times.....did you agree and sign an extension? If so, you are out of luck for the most part. However, if the delay has caused your costs to go up, perhaps the seller will give you some concessions to apply toward your increase in cost. It's usually better to compromise than to just back out, if it's a signed contract and you have the wherewithal to get financing. Usually, the financing condition you have listed doesn't list a specific rate qualification, unless you thought ahead to include that. Better to get some local legal advice from a real estate attorney in your area.

Answer 4

Two things - Firstly, if your interest rate changed due to your credit changing prior to closing, even if you had closed inside the 45 days, they would not have given you the better interest rate. Secondly, the terms of your contract (and executed extensions) will determine if you can back out now. In Texas, the financing condition addendum IS conditioned not only on your ability to get financing on the property, but also at what cost that will be. It also has a timeframe, after which you cannot back out due to the cost of the financing. Ask the Realtor who's representing you. If they don't know, ask their broker.
Good luck.

Answer 5

You need to consult an attorney quickly.

I can give no legal advice but can say that your rights depend highly on the wording of the contract.

It could range all the way from

You get to back out and you get your deposit back

up to

You have to close the deal or pay "liquidated damages" of some large amount.

It is unlikely that the deal was contingent on the price of the financing, as long as you are able to qualify.

Answer 6

"If" your offer to purchase was contingent on financing all you need is the rejection by a financial institution in letter form based on what you stated your credit report says.
Here go get all the credit reports so you don't make a mistake:
Once per year free credit report from all three credit reporting agencies:
http://www.annualcreditreport.com/cra/index.jsp
When you get your credit reports and you feel they need fixing you'll need this:
Credit Dispute Reporting forms: http://www.gpoaccess.gov/cfr/index.html
Buena Suerte

Answer 7

you do no longer prefer a lawyer, you prefer a competent realtor. you are able to lower back out each of how as much as last, yet without contingencies, and so on., you will lose your earnest money. a million. paying for a house is a vast dedication, you ought to have a realtor. in the event that they have a realtor, you prefer one. 2. Grand scheme of issues $one thousand isn't lots. in case you do no longer sense mushy with the deal, stroll away. 3. whilst coping with the supplier, they may be inspired adequate to sell the domicile that they could extremely alter the contract than see the deal fall by way of. 4. continually make issues contingent on an inspection. continually have the domicile inspected. as quickly as the inspection is finished, you initiate off negotiating in step with issues that would desire to be repaired or as much as date, and so on. On Monday, get a realtor. How do you go with a realtor. Ask them how some years they have been interior the corporation. what share homes they often close each month. Ask who the broking provider is. Ask what form of belongings they often deal in. Ask people you recognize who they used, ask the guy who works on the economic corporation who they used. heavily, i know you have become close to to the top and you think of you are able to save a pair of greenbacks by way of skipping the realtor, yet surely in the adventure that your place seems to be a lemon, or you overpay, it's going to be considering you probably did no longer have a realtor, and you will spend a number of cases the cost of having one on issues that by no skill ought to have been issues.