In fact, I'm just remembering now that I was one of those buyers who didn't have sufficient 1st-mortgage lending for the whole deal. 

With that said, you technically can refinance any time you want after you close because these conforming loans generally have no prepayment penalty.The other aside that I will mention is that you will want to make sure you have sufficient comparable sales in your area that will be able to document enough value before you spend money on a non refundable appraisal.

The worst part about holdovers is the waiting period if you fail to provide a timely, or sufficient notice.

I would add a clause into your lease to say this room shall no be use as a sleeping unit / bedroom. 

All 5 of them shook their heads in disbelief, saying "who in the world would let a complete stranger sleep in their home?

Aspen or Vail Colorado "Money never sleeps" in either town.      

The answer is no,plain and simple.If he wants to run a home based business so badly,he can buy his own house and use his own insurance and take his own chances with city code enforcement.This is a legal disaster waiting to happen if you allow it.Find better tenants if they threaten to move,you'll sleep easier at night.

The denial was based on lack of sufficient cash flow and credit, not from clearing out a case of beer!

Different opinion, if you are already cashflowing sufficiently at current rent, I wouldn't up the rent to market right away. 

You probably wouldn't have sufficient cash reserves to deal with a potential maintenance emergency.