House on Hold...

Well, we heard back from the underwriter. They decided that we were overpaying for the house based on comparables (even though the house appraised at purchase price) by almost about $8,000. The thing about comparables...there are very few. Because we purchased in a small town (pop. 1000), only a handful of houses sell per year in the whole town, and the price on the home can range from $40,000-$800,000. Soooo, finding one similar to ours is difficult...maybe 1 per year. So based on what the underwriter did have, they had to deny the loan.

So here's the next step: Our realtor, the seller's realtor, and the bank have been working to find other comparables that justify our purchase price. The underwriter has agreed to look at comparables from other area small towns since Springville is quite limited. They are supposed to make another decision by Friday.

If that doesn't work, the only other option is to renegotiate the purchase price, which is highly unlikely. The seller's are already in some financial trouble, and really could not afford to accept less than the current purchase price. It is more likely that they will put the home back on the market and wait until someone comes around that is paying cash or has a conventional loan. It's just this FHA thing that is so picky for us.

So that's where we stand. We've kind of discussed our backup plans, which include renewing our lease month to month and picking up the pieces and starting the house search again right away, or waiting 6 months and buying a car instead. Luckily we haven't given notice to vacate here yet!

Not sure if anyone is actually reading this or keeping up, but I will continue to post updates here when we get them!