How to prove mortgage is attainable

Anyone with a pulse can get a pre-approval letter -- they're worthless.

If the seller doesn't want financing, and you need a mortgage, then clearly this is not the home for you.

There is a difference between prequalification (which is pretty worthless) and a preapproval letter.

A preapproval letter includes review of your FICO, your pay stubs, your last W-2, etc.

If the seller refuses to accept a buyer with financing at all, then you're out of luck. (So is the seller.)

But what you or your broker could do is present an offer in writing with some bio info about you, including your salary, where you work and for how long, your assets--just put it all out there in the offer.

This is one strange reason having a buyer's broker can help, because it looks like some third party is vouching for you. Which is true, if the broker cares enough to make sure you can actually afford this apartment.

If I can help you let me know, kharby@rutenbergrealtyny.com.

Matt, Kharby, Thanks for the advice. The reason I am pursuing this is because the seller is on the fence with financing. They have flipped from No to Yes back to No. It's very frustrating to have the rug yanked out after they give a go ahead. Most people would give up dealing with them, but I do like the place. I don't think the seller's broker is very experienced in this situation as he stated he wanted to sell to us (full comission for him), but he has not given near the advice in this thread and related topics on the SE board. Therefore I feel we have to make this happen on our own.

Would you suggest using the REBNY Financial statement forms with submitted offer along with W2 with sensitive parts blacked out?
What kind of letters is a bank willing to generate aside from the commitment letter and pre approval to show we are good candidates.

zeet - Does the seller not want financing or not want to give you a financing contingency? Because they should care less where the money come from at closing. But it would then be on you to be certain you will get financing.
Along with an actual pre-approval letter in which we will verify credit, income, and assets, I can provide any other information the seller needs. Also, the letter would be coming rom Bank of America as opposed to ABC mortgage broker. And if the seller even wants to call the bank, they can. Aside from that there isnt really much that can be done prior to contract signing. sunny.hong@bankofamerica.com

Sunny, the seller wants no financing. They want a cash deal and the reason we can figure is they are close to forclosure and do not want to risk a buyer who can't get a mortgage, as best as we can figure.

no financing usually means a fast closing also. If you are able, maybe add that you are willing to close quickly to your letter as someone else noted above.

I am not a broker. You need a broker. The broker wants to sell to you because you don't know what you are doing. If they are near foreclosure, you might be better of with a short sale. You need a broker. Find a reliable one who knows the area, knows about foreclosures, financing, and will really work on Your behalf.

...but zeet is afraid of losing this once in a life time opportunity to buy a one in a million home at the bottom of the market. ...of course the seller believe the opposite is true about the future price...

shong, are you sure it's wise to suggest that zeet remove the financing contingency from the contract, especially since you're not anonymous here?

Do you mind if I ask what percentage you are putting down?

Sunday, that's funny thanks for the does of reality.

No I wouldn't remove the no finance contingency, that would be madness. They did ask...several times.

Cash buyers are rare. Sounds like you will be able to get this one on the courthouse steps. and you should let them know that is your strategy. they might change their tune.

sunday - i wasnt suggesting zeet remove the mortgage contingency. That certainly wouldnt be a wise choice.

Hi Zeet,

Firstly I would like to give you a perspective from the sellers position to help come up with a solution.

With regards to taking out the finance contingency, which I am NOT recommending in this economy, too many unknowns can come up ie like banks not lending in that building for a myriad of reasons, or I have seen bank valuations coming in at 40% below the contract price ie $1,000,000 contract coming in at $600,000 bank valuation then a possible 70% loan being only $420,000 not the expected $700,000 with you having to come up with the shortfall, etc.

There is a very good reason why the seller wants all cash / or no finance contingency contingency. If the buyer doesn't have all the cash or knows how hard it is to get money from the banks at the moment whilst knowing exactly his own financial situation is and still doesn't want to do the risk of losing his 10% down, why would the buyer want to take this risk ?
The seller then:
- Waste's 3 months of time and carrying costs by taking the property off the market (effectively for a minimum of 3 months, 1 month to get the loan and up to 2 months of "reasonable time" which the law allows for delays in settlement.)
-Legal fees to get into this "contract" where the buyer might not be able to perform.
- Be willing to back the buyers finance's when the buyer isn't (and you can be assured the buyer has the real version. I have seen people state bonuses as income etc).

"Ways to prove/ convince the seller".
To be direct here, I like the word "prove" means to me that you believe you can perform, whereas the word "convince" means to me that you want to be given a chance at performing in the contract.

As a seller, for me to be convinced that the buyer was able to perform and not just wasting my time and money ie getting a 3 month option on my property to see if they like where the market is going for a $2,500 lawyer bill, then be able to flake with the finance contingency (slightly cynical view I know). I would like the following. (not suggesting you do these, you have to feel what is right for you).
These are suggestions if you truly know and have the ability to buy the apt.

- Assuming that you have already submitted your financial picture to the seller ie copies of the last 2 years tax returns, statement showing money in the bank available for the deposit and value of any other assets ie share certificates, plus of course any debt owing.
- My legal fees paid for going into contract (with a limit of say $3,500), with a clause that of course refunds the money back if the buyer performs in the contract.
- I would want to limit the time the property was off the market in this chance contract, so a timetable would be put in the contract.
ie
- That a standard Bloomberg contract signed with in 1 week of receiving.
- That the signed contract be handed to the mortgage broker or broker's with in 24 hours of it being signed.
- That all documents between the mortgage broker and the buyer be transparent with me being cc'd on all correspondence.
- That I have a commitment letter from your bank in say 20 days (first see how many days is reasonable with your broker and add a buffer).
- That the board package is being completed and will be ready to submit with in 24 hours of receiving the commitment letter to the managing agent.
With 100% ability for the seller to be able to terminate the contract if any of the above steps are not done.
This way it would at least put a cap on me not losing money and no more than 30 days being tired up.

It is a really tough time we are in with banks not being transparent about what they are willing to loan and responsibly sticking by it so when they do fail I don't believe it should all fall on the sellers shoulders, so the above points for the buyer of being totally responsibility /prompt etc, helps minimize the loss to the seller, which could convince them to move forward with you.

Hope this helps.