More details: My fiance [F/24] and I [M/25] are working on getting ourselves a place to live before we get married in April 2018. We started the process about 3 months ago. I will build a timeline so you have an idea of where we are at.
We were pre-approved for a mortgage shortly after Valentine's day and decided that though it would be tight, we would be able to afford the mortgage and utilities payments.
We found a 2br 1.5ba townhouse that we liked not far from us listed for $215k and we offered $212k which was accepted.
The inspection was completed on the 1st of March with not many issues to be found, a few of the major ones we worked out with the sellers to have some funds put in escrow in case of issues before final walkthrough.
The myself and my fiance both signed the contract in the presence of our attorney about a month ago, the fully executed contract signed by the sellers came in on the 10th and the Title was immediately ordered.
Now, fast forward to this past week, the appraisal finally came in and valued the condo at $195k which is much less ($17k) than the price we agreed upon.
What this means is that our conventional loan is changing from 80 loan/20 down, to 87% loaned which requires us to pay PMI of $50/month extra. We will have to pay this until either the LTV returns to 80% or a new appraisal, perhaps a year from now, finds comps nearby valued higher than they are currently and we lose the PMI.
Both our Attorney and Mortgage Loan officer/agent? stated that since we are in contract, we cannot walk away from the deal and must pay. We had no idea going into this that the home value would be so low or that we would have to pay this.
We are now at the place where we will potentially have to pay $212k + the cost of PMI to balance out the 87% LTV on a home valued at $195k. We will certainly be losing out of $10k's of dollars at this rate once we decide to sell.
Aside from the valuation. we were already going to have to heavily budget to make the mortgage payments, now with the added cost of the PMI, that budget gets even tighter.
Right now, our attorney is going to the seller's attorney to see if they can come down in price at all, though I don't see that going anywhere.
Our attorney said that the only way we would be able to walk away is if we got a "denial letter" from our lending agency. After talking to out Loan officer, we were told that since we are working through the SONYMA Achieve the Dream program and were already approved, they cannot deliver a denial.
Are there any recommendations? Is there no way for us to walk away from this? Is this a normal chain of events to occur? Would there have been any way for us to know about the appraised value before we agreed on the price? (which we never would have agreed on if we knew the value)
Also, please let me know if this is more of a /r/legaladvice question so I can x-post there.
Thank you
EDIT: apparently, I inadvertently posted to the misspelt /r/personalfiance. Whoops!
Submitted April 03, 2017 at 02:08PM by KD2JAG http://ift.tt/2oudPLY
