I personally don’t understand some of the rules about houses that were purchased to be renovated and resold. Here is what doesn’t make sense to me. If the home has been renovated, has a deposit from a qualified buyer, had a home inspection and an appraisal or in some cases two appraisals, then what difference does it make how much profit the house flipper makes or in how many days?
I am doing a mortgage for a client, buying a home that is being flipped. The lender has asked for a list of all the renovations that were done, how much was spent for these renovations and how much profit is being made. We asked the underwriter, why this was being asked for and were told, “we just want to know.” Also, that if we don’t get the information, we’ll deny the loan. OK, deny the loan based on what guidelines?
The two Realtors, the seller and buyer have every right to be upset. We moved the loan to a different lender, already have an approval, but have been delayed by almost 3 weeks. We filed a complaint against the underwriter, but I’m not convinced it will make any difference. Some of the regulations and restrictions have gotten totally out of hand.
The article below provides some guidelines, but every lender seems to be different.
By: Bliss Sawyer