Would you back out of home purchase given these circumstances?

[rorycam2]

We're under contract for a house. We did the inspections, agreed upon repairs, but still have one way out, a financing contingency if we aren't able to get the mortgage. We love the house, but I have in the past several days discovered that my employer is planning layoffs which might likely include me. We've lost 2 huge accounts at work, my industry is not doing well overall, and we just had a conference call in which getting additional training to move into another part of the industry was suggested to us outright. I'm very nervous. We can't pay for this house without my salary.

Would you try to get out, or just push on through, hoping for the best? We love the house, don't have a house to sell, and I just feel so bad if this doesn't go through because our realtor has spent so much time on us. I'm sitting here, knowing that I need to go talk to the mortgage broker if we are trying to get out, but not sure if that's fair to everyone involved since I do, at this moment in time, still have a job.

Any advice?

[vonfirmath]

Is the new house more expensive than the current one? if so, that seems wise

[TwoBees]

If you do lose your job, you most likely won't be approved for a mortgage, so if you really want the house, secure that financing right now. But don't do it if you can't pay for the house with just one income. If you can't live happily on just one income, then don't buy the house. There is just too much at stake, if you do end up losing your job (I hope you don't though!).

[HIU8]

Totally agree. Don't buy it if you can't do it on one income (for however long that may end up). It will be a massive source of stress for both of you if the worst does end up happening.

[ashleybama24]

If you can't pay for this house with just one income, I would absolutely back out. Is there a way you can put down a bigger down payment so your monthly mortgage will be lower?

[mommylamb]

Did you already get pre-approved by the bank? I'm not a lawyer, but I wonder if the pre-approval would mean that you can't get out of the contract. I would feel really uncomfortable moving forward with it under those circumstances though. Hugs, and best of luck.

[HonoluluMom]

Your employer most likely knows that your looking at buying a home because your financing company probably got employment/salary verification from them. Is it possible to ask your employer about your job security due to your upcoming home purchase?

If that's not possible, I agree with PP that if you can't comfortably afford the mortgage on one income, I would not purchase the home.

[kijip]

Shaky company in a declining market for your skill set (thus the encouragement to retrain from your employer) plus the detail that you say you need your income to pay for the house, I would totally back out. And since even pre-approvals can be withdrawn if your financials have changed, or how they read your financials changed, you should still be able to get out of this by letting the finance people know that your job is on shaky ground. It sounds like you are renting now because you don't have a house to sell. Stay renting, save up more and consider retraining options.

[crl]

I would back out. You can probably get the financing people to deny you by disclosing your job situation. Otherwise, you would be out the earnest money. But that would still be better than being in foreclosure a year from now.

Catherine

[AnnieW625]

I would back out too just to be on the safe side. Good luck.

[brittone2]

Yep, I'd back out. if you can swing it on one income without digging yourself into an enormous hole, that would be one thing. The housing report today was not too favorable....prices are still declining in many places. If you are worried about your job stability, I would keep renting for now.
If you are really concerned about the time your realtor invested, buy a GC or give a cash gift and call it a day. We did this after finding a FSBO house to buy in our friends' neighborhood (had only seen a few houses with the realtor, but he had invested some time up front in getting us into our rental when we initially relocated, knowing we'd use him when the time came to buy. And then we found a FSBO after seeing about 3 houses with this guy. We gave him a cash gift for his time and he was very appreciative. Write a letter of thanks with it stating that you'll be happy to hand out his/her name to friends/family, etc. While you feel badly for the realtor, don't let that dig you into a financial hole you can't climb out of.

[vludmilla]

I would back out given that you think it is likely that you will lose your job and you can't make the payments on one salary. You will NOT love the house if it causes you unending financial distress. And don't worry about anyone else's stake in the transaction (other side, realtor) you need to look out for your own best interests. I assure you that they are looking out for their own best interests too.

[amldaley]

Your employer most likely knows that your looking at buying a home because your financing company probably got employment/salary verification from them. Is it possible to ask your employer about your job security due to your upcoming home purchase?

If that's not possible, I agree with PP that if you can't comfortably afford the mortgage on one income, I would not purchase the home.

:yeahthat: on both counts.

[TwinFoxes]

I would back out. You can probably get the financing people to deny you by disclosing your job situation. Otherwise, you would be out the earnest money. But that would still be better than being in foreclosure a year from now.

Catherine

ITA. x1000


Your employer most likely knows that your looking at buying a home because your financing company probably got employment/salary verification from them. Is it possible to ask your employer about your job security due to your upcoming home purchase?


I wouldn't trust an employer to tell the truth. Sometimes they're bound by their fiduciary responsibility to the company not to disclose upcoming layoffs. I've known people who were lied to to their faces regarding possible layoffs.

[larig]

Welcome to the BBB. I was in your boat when pregnant, and made the decision to walk away from the house. It was 2008. That house was great, but it was a bad time and I had a bad feeling about it. I've never regretted our decision.

[egoldber]

I wouldn't trust an employer to tell the truth. Sometimes they're bound by their fiduciary responsibility to the company not to disclose upcoming layoffs. I've known people who were lied to to their faces regarding possible layoffs.

:yeahthat:

As a manager, I was told I would be fired if I let employees know that a layoff was impending. It sucks and is one reason I don't ever really want to get back into management.

Even if this round of layoffs does not effect you, it sounds like your job is not in good shape anyway. I would back out.

[♥ms.pacman♥]

I would back out. You can probably get the financing people to deny you by disclosing your job situation. Otherwise, you would be out the earnest money. But that would still be better than being in foreclosure a year from now.

Catherine

:yeahthat:

[SammyeGail]

I agree with PP's about if you can handle the MTG on one income. If you do get laid off, do you know the chances of you finding a new job and how fast?

I am sorry you are in this situation.

We just purchased, I didn't get the home I wanted, it was too much with our other house to sell. We have decided to rent the old one out. Our RE agent there has found a great tenant, they say they are 99% sure, but haven't even seen the actual house yet.

With the townhouse we bought, if it comes to it where we have no one in our other house, we can swing both payments, but it will be tight. If this tenant does rent the house we'll be in really good shape for a year.

As long as one of our vehicles doesn't die, fingers crossed.

Good luck either way! Like PP said, some areas are still going down. I am reading conflicting information for our area. I feel we did very good on our purchase here (price per sq foot and upgrades), when we purchase an actual home this townhouse will rent out easy.

I made a compromise on what I would have loved to live in, but looking back the property values are so unstable, when they stabilize more we may purchase a long term home then, if our house in TN is sold or becomes a steady rental. I had to accept buying a long-term home would be a crapshoot right now. Plus we couldn't afford the mtg if our other house was empty....

Whatever your situation, err on the side of caution. Like our RE agent here said, if there is a problem with the sale, it just wasn't meant to be. There can be other homes out there listed in a few months that you may love more!