Any Chicago associates starting this Fall thinking of buying

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SpiteFence
Posts: 131
Joined: Mon Nov 01, 2010 12:26 pm

Any Chicago associates starting this Fall thinking of buying

Postby SpiteFence » Sun Jun 03, 2012 11:39 am

I've been following the Chicago real estate news and its seems like this is the worst time to be a renter in the city. Assuming you can put together enough for the FHA minimum, is anyone considering immediately upon moving to the city? It seems like that the ppm for equivalent units renting vs buying is pretty staggering right now. Thoughts?

ToTransferOrNot
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Re: Any Chicago associates starting this Fall thinking of buying

Postby ToTransferOrNot » Sun Jun 03, 2012 11:45 am

The huge problem I've run in to is that employment starts too late to be able to close in time. Mortgage lenders don't seem to be willing (they claim it's actually forced by regulatory concerns) to lend to someone based on future employment--even if you have a letter saying "you're starting on date X"--because no firm is going to give you a non-revocable contract of employment.

It's really, REALLY frustrating, because the rental market here is fucking terrible right now. I think I'm going to end up having to pay about $1,700 a month. I have a credit rating around 800, could get a 7-year ARM for well under 3% interest. Even on a 3-year time horizon assuming NO increase in rent AND no appreciation in the housing market, you end up about 5-10k ahead. Expand the time horizon or make appreciation in rent/housing more realistic, and you're even further ahead buying. It fucking sucks, but not a damned thing to be done about it.

If I could find a place that would let me take possession for 3 months before closing, I'd be able to find a place. Unfortunately, the good deals in Chicago right now are all forcelosures/short sales, and bank sellers won't let you take possession before closing (even if you offer to pay "rent").

Anonymous User
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Re: Any Chicago associates starting this Fall thinking of buying

Postby Anonymous User » Sun Jun 03, 2012 12:08 pm

ToTransferOrNot wrote:The huge problem I've run in to is that employment starts too late to be able to close in time. Mortgage lenders don't seem to be willing (they claim it's actually forced by regulatory concerns) to lend to someone based on future employment--even if you have a letter saying "you're starting on date X"--because no firm is going to give you a non-revocable contract of employment.

It's really, REALLY frustrating, because the rental market here is fucking terrible right now. I think I'm going to end up having to pay about $1,700 a month. I have a credit rating around 800, could get a 7-year ARM for well under 3% interest. Even on a 3-year time horizon assuming NO increase in rent AND no appreciation in the housing market, you end up about 5-10k ahead. Expand the time horizon or make appreciation in rent/housing more realistic, and you're even further ahead buying. It fucking sucks, but not a damned thing to be done about it.

If I could find a place that would let me take possession for 3 months before closing, I'd be able to find a place. Unfortunately, the good deals in Chicago right now are all forcelosures/short sales, and bank sellers won't let you take possession before closing (even if you offer to pay "rent").


I haven't talked to any mortgage lenders yet, but I had not anticipated that being a problem. I wonder if there are any lenders who would be more willing to people in a situation like ours. I wasn't planning on moving until August and I start in early September. That can't be too different of a situation from those previously employed who are relocating for a new job?

ToTransferOrNot
Posts: 1928
Joined: Thu Jan 22, 2009 12:45 am

Re: Any Chicago associates starting this Fall thinking of buying

Postby ToTransferOrNot » Sun Jun 03, 2012 12:16 pm

Anonymous User wrote:
ToTransferOrNot wrote:The huge problem I've run in to is that employment starts too late to be able to close in time. Mortgage lenders don't seem to be willing (they claim it's actually forced by regulatory concerns) to lend to someone based on future employment--even if you have a letter saying "you're starting on date X"--because no firm is going to give you a non-revocable contract of employment.

It's really, REALLY frustrating, because the rental market here is fucking terrible right now. I think I'm going to end up having to pay about $1,700 a month. I have a credit rating around 800, could get a 7-year ARM for well under 3% interest. Even on a 3-year time horizon assuming NO increase in rent AND no appreciation in the housing market, you end up about 5-10k ahead. Expand the time horizon or make appreciation in rent/housing more realistic, and you're even further ahead buying. It fucking sucks, but not a damned thing to be done about it.

If I could find a place that would let me take possession for 3 months before closing, I'd be able to find a place. Unfortunately, the good deals in Chicago right now are all forcelosures/short sales, and bank sellers won't let you take possession before closing (even if you offer to pay "rent").


I haven't talked to any mortgage lenders yet, but I had not anticipated that being a problem. I wonder if there are any lenders who would be more willing to people in a situation like ours. I wasn't planning on moving until August and I start in early September. That can't be too different of a situation from those previously employed who are relocating for a new job?


(I envy your September start.)

As I said, the mortgage lender I've been talking to has been blaming regulatory problems rather than their own internal policies. I'm going to check with my firm's prefered lender (I didn't realize the firm had one until today) to see whether there will be a workaround.

You should find a lender and start looking at this stuff soon, if you're going to want to give it a shot. If you're going to be looking at short sales, you'll need to put in an offer soon in order to close in August.

SpiteFence
Posts: 131
Joined: Mon Nov 01, 2010 12:26 pm

Re: Any Chicago associates starting this Fall thinking of buying

Postby SpiteFence » Sun Jun 03, 2012 12:22 pm

Maybe you could negotiate a 3 or 6 month lease with an option to buy? That might give you enough time to demonstrate income to the lender.

Im going to start calling up lenders tomorrow and see if I can figure this out.

Anonymous User
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Re: Any Chicago associates starting this Fall thinking of buying

Postby Anonymous User » Sun Jun 03, 2012 2:43 pm

See also my thread from a few months back with the same problem, although DC/VA market.

viewtopic.php?f=23&t=181097&hilit=Mortgage

Lenders are running scared and not letting anyone qualify. I'm getting double-screwed on this since I'm trying to sell as well.

ToTransferOrNot
Posts: 1928
Joined: Thu Jan 22, 2009 12:45 am

Re: Any Chicago associates starting this Fall thinking of buying

Postby ToTransferOrNot » Sun Jun 03, 2012 4:05 pm

SpiteFence wrote:Maybe you could negotiate a 3 or 6 month lease with an option to buy? That might give you enough time to demonstrate income to the lender.

Im going to start calling up lenders tomorrow and see if I can figure this out.


Yeah, we've looked into that, but needing a front-end lease basically locks out any short sales and forclosures--that's where the real deals are.

SpiteFence
Posts: 131
Joined: Mon Nov 01, 2010 12:26 pm

Re: Any Chicago associates starting this Fall thinking of buying

Postby SpiteFence » Sun Jun 10, 2012 1:07 pm

So just wanted to update for anyone that was lurking. I have found a number of lenders who are able to make the situation work. You just need to provide an unconditional verification letter from your firm, which mine got to me in a matter of hours.

My obstacle now is being able to have the cash on hand at closing. In order to do this, the lenders require you to have enough cash on hand to cover principal/interest/PMI/HI/taxes for the time period between closing and the start of employment plus 3 months. I've got enough for he DP, but the additional 4 months I'll have to borrow from a relative or something.

Anyway, point of the story is it appears possible. And with the rental market the way it is now in Chicago, I think I am going to do it.

Anonymous User
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Joined: Tue Aug 11, 2009 9:32 am

Re: Any Chicago associates starting this Fall thinking of buying

Postby Anonymous User » Sun Jun 10, 2012 5:00 pm

I'm very surprised your firm agreed to an "unconditional verification." That's basically binding themselves to an employment contract three months ahead of time, which my firm was adamant it will not do.

Further, my lender said the criteria under the new underwriting codes, at least for them, was that they would need to be able to call my firm, unannounced, and ask *whomever* (no "just ask for ____ and it will be OK") whether I was in the HR database or not. If no, no loan.

Anyhow, glad it worked out for you.




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