First of all, I would steer clear of the loan officer who told you one thing and is now telling you something else. Did you check with anyone about getting an FHA loan? This would help you in that you can put down 2.5%. The house does need to pass an FHA appraisal/inspection. (no mold on roof, no peeling paint, handrails on all stairs etc.) (Mostly safety issues). If there are some minor things that need to be done and the seller won't do them, perhaps they would allow you to do them at your expense to pass the inspection to get to closing?

"I just don't know what to do!"

Because you don't meet the current requirements for a home loan you probably should wait and save enough money to be able to afford a 20% down payment or find another house that meets FHA requirements.

Looks like you are experiencing the new more restrictive lending environment first hand.

Check with the Finance Authority in your state for low-interest loans that do not require any DP and also help with closing costs. I bought my first house with a 5.5% loan through my state's Finance Authority's first-time buyer program (called First Home) with zero money down. I also received a grant from same that covered all of my closing costs. This was four years ago, and I know things have changed in the housing/lending industry, but I'm sure there are still programs out there for first-time buyers. Check with a realtor or a lender. I had my loan through Countrywide.

I know how you feel. I was shocked the first time (many years ago) when someone in the mortgage industry out-and-out lied to me about the details of a mortgage.

I think you need to speak to other lenders. There are plenty of products out there which are sold to Fannie Mae or Frddie Mac that allow 5% or 10% down. The mortgage industry has not changed that drastically that they require 20% down.

I was fortunate to speak with the Manager at the local Wells Fargo yesterday who indicated that the 3% down first time home buyers program through Fannie Mae is still in place. She indicated that this number was going to change to 10% in May due to Fannie's condition. Interesting to note that Wells Fargo had 10% down for investment property, while Countrywide is adament at 20%. Looks as if Countrywide finally learned to lift the seat.

Sorry to hear about your troubles. Is there any way you can come up with a larger downpayment? Borrow from your parents? Sell some stuff?

When I bought my first house, the mortgage approval process went smoothly until the Friday before the Monday closing... when the bank suddenly decided they wouldn't give me a mortgage because I was self-employed. My mother generously agreed to co-sign the loan, and I refinanced within a year on my own. It was very stressful.

Maybe this is why sellers consider pre-approval to be meaningless.

No, I don't have any relatives I can borrow the money from. My parents are currently not able to offer any assistance and won't be able in the future either. It took me several years to save enough for the downpayment I currently have and considering I have a car payment and rent and the price of gasoline is outrageous and the only thing not going up are wages, I am not able to save more than maybe $400 month and that is one reason I want to buy a house because my house payment would be several hundred dollars lower than my current rent payment. I'm just frustrated because it seems like through every step if this process most of the "professionals" I've encountered (laywers, realtors, loan officers" are either incompetent or deliberately misleading. Oh well life goes on.

FHA loans are perfect for situations like this.

If you qualify for a conventional loan, you'll qualify for an FHA.

OMG.....you are in for a drubbing....does anyone teach you that as-is means the seller knows something?

offer $25,000 less or walk away, this housing bust is just getting started.

------------------------------------------------------
So I made an offer on a house I found (being sold as is)

OH OH did you use a calculator and add it taxes insurance repairs, maintenance HOA condo fees, and heat /AC?

NOW how much is your monthly bills vs renting

Plus do you know how to snake a backed up tub?, or replace a kitchen faucet that is leaking money down the drain everyday? Or do you have enough saved, to pay a plumber or roto rooter $100hr?

-----------------------------------------------
I want to buy a house because my house payment would be several hundred dollars lower than my current rent payment.

Is richardallen a troll? He sure sounds like one.

HAHA troll, nope just someone who can look at both sides fair and square.

Most buyers need a lot of education in buying a home. Noone can answer my simple question:

Why should i give up a $1200 2 bdrm apartment in nyc, with a great landlord, and take on a $3500-4000 total monthly bills buying this 2 family house?

When the numbers get close together i will buy, that means the current price of $750K has to be lower then $450K...even if my rent goes up to $1800 its still cheaper to rent.

Plus America is losing its long term job base, so unless you have a reason to live in the same area for at least 10 years, then owning is going to cost you a lot ...better to rent and max out the 401k IRA.

So not a troll just someone who can use a calculator wisely

Hmm... I love a good debate, but I'm not biting. Richardallen just joined GW today. Yeah, he's a troll. (Apologies, newhomeseeker, for the brief - and now finished - hijack.)

Troll: An Internet troll, or simply troll in Internet slang, is someone who posts controversial and usually irrelevant or off-topic messages in an online community, such as an online discussion forum or chat room, with the intention of baiting other users into an emotional response or to generally disrupt normal on-topic discussion.

Has anyone else noticed that Richard and Re_agent both showed up today, and both seem to be posting the same type of controversial, responses? Probably just one troll with two different names.

NO i just love to hear all you whine about the housing market.

Lets be honest you don't want to sit down with me over coffee because there is a good chance my numbers are far more correct then yours.

I lay out the cost per month, and you call me a troll, well lets see your numbers and i don't mean renting money from the bank aka Interest only loans

Fair is Fair.

"Interesting to note that Wells Fargo had 10% down for investment property, while Countrywide is adament at 20%."

20% has been the minimum for investment properties for a long time.
If you put down less than 20% in many cases you cannot achieve even a neutral cash flow.
Lenders are very reluctant to finance anything that appears to have a negative cash flow since it requires ongoing capital from the investor.

Owner occupied properties have had a good break for many years now.

Back to the OP... can you eliminate your car payment somehow? Sell your car and buy an inexpensive used one?

Or perhaps start looking at smaller/cheaper houses?

If the numbers aren't working out, you're going to need to make a compromise somewhere and scale things back. It hurts, I know.