Legal Question in Real Estate Law in Maryland

I'm in the process of purchasing a new construction as a first time buyer. I found the location independently of realtor and was told that if I decided to get a realtor I would have to pay out of pocket because he/she was not a "procuring interest". I signed the purchase agreement. In trying to get a mortgage loan for the home through the builder (due to very nice incentives) I was initially told that my debt to income ratios looked good and I was pre-approved, but now I'm being told that their underwriter did not approve USDA loan type and I am now being encouraged to go FHA which would require a downpayment that I'm not sure I'll be able to scrounge up prior to closing in addition to the increase in my mortgage cost due to the PMI and other general factors that are not required under a USDA loan. It was also suggested to me to roll the 3.5% into the mortgage which I think is crazy.

Is it to late for help?

Should I use another lender and forego the incentives (increasing the costs)?


Asked on 3/01/10, 9:42 am

1 Answer from Attorneys
Robert Sher Wagshal and Sher

It sounds like you have neither the equity for a down payment nor the income to cover ongoing mortgage payments to afford this property. Generally an FHA loan only requires a small down payment, depending on the program, but it sounds like even that is going to be difficult for you. This is probably why the sales rep suggested financing your closing costs. You could apply with a private mortgage broker who would have access to a number of programs that might fit into your financial profile, and then weigh that against the loss of the builder incentives to see what works best for you.

Read more
Answered on 3/08/10, 6:40 am


Related Questions & Answers

More Real Estate and Real Property questions and answers in Maryland