Buying That First Home: Bank Drama

NOTE: This is a migrated entry.

So I got a call from my agent, who got a call from my broker. It seems my financing has been approved!...with a contingency. Ugh.

Before I go into the contingency it's important you get a little background. My credit report is pristine. I have no negative accounts. I did file Chapter 13 BK back in 2004, was discharged this month. I really did it because at the time, my income far exceeded my debts - even though I wasn't really delinquent on anything, I just needed a reprieve. By the time the BK was near discharge, my income had tripled, so it was significantly easier to deal with the debt, plus the biggest loan I had on there was a private loan from Sallie Mae - but the school closed before I finished. California's Student Tuition Recovery Fund made that go away and gave me all of my money back. Also, I had managed to open some credit card accounts to get some positive account history going on. I have three credit cards that I've had for over two years.

So now you know the history. The contingency is...the lender wants all of my credit cards paid off. That's no easy task, at least not in the short timeline they want it done. I can pay off my credit cards in roughly a month, give or take...unfortunately this has to be completed by July 29th. Not happening. It's not a lot being asked...it's the timing of it all.

So, my guys are going to work with the list agent and bank to see if they will do one of the following:

1. Accept a loan price increased by $3000, offer a $3000 credit at closing, and set a requirement that the credit be applied to pay off all credit card balances, with an agreement from the lender that we're doing that; or
2. Excuse the earnest money deposit (which is just shy of $3,000) so I can put that towards the credit cards instead, and close with no money out of pocket.

I actually prefer the first option, because the bank will still get the earnest deposit, which they should get. The second option is dangerous, both to me and the bank, because the bank doesn't benefit at all except they get the house off their books.

So...I continue to wait while I play this juggling act between banks. Fun.