Monday, April 20, 2015

3 Monumental Mortgage Money Mistakes to Avoid

As the Spring home buying season heats up, I want to share with you 3 mistakes that can cost you BIG MONEY. I know it's natural to go house hunting, tour your dream home and then meet your realtor to write an offer. But before you embark on that american dream to home ownership with enthusiasm and your check book, be sure to plan correctly.  Here are my top 3 Monumental Mortgage Money Mistakes to Avoid that can save you thousands of dollars:

☑  Not getting pre-approved
☑  Not understanding your loan options
☑  Not planning/asking the right questions

Not Getting Pre-approved
This can easily cost you $1000 right off the bat. Ugh! Not fun for your wallet. Lets say that you go home-shopping and make an offer on a new home and you are pre-qualified, but not pre-approved. If the lender calculates your income differently than you did during the pre-qualification process, you may not be on the same page when it comes to actually closing the loan. That puts your earnest money deposit (aka binder) in jeopardy and can cost you home inspection and appraisal fees. Appraisal, home, and pest inspections can easily total $750-$1,000.

Not Understanding Your Loan Options
What down payment options do you have? Will a small difference in down payment equate to saving, or paying, tens of thousands in PMI? What about property type and foreclosure properties? There are certain loans that are for those properties and certain loans that are not for foreclosures and condos. What if you made an offer on a HomePath property, but your lender didn’t offer that type of loan? What will that cost you? Higher down payment, unnecessary appraisal costs, and, possibly higher mortgage insurance; again this can be $1,000s that you don’t have to spend! See Chapter 13 for a full discussion on Loan Programs, and Chapter 14 for a full discussion on Loan Terms.

Not Planning/Asking the Right Questions

How much seller credit can you receive for which loan types? What? Yes, certain loans allow for maximum seller help for your purchase. For example, FHA allows for 6% seller help, while a conventional loan allows for 3% for a primary residence and only 2% for an investment property. These are important discussions to have with your lender before your real estate agent writes up your contract offer to the seller. Let’s say you could have gotten 6%, but didn't know and you left $1,000’s on the table and then used your money instead of the seller’s? Bummer!

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Monday, April 6, 2015

Does it take a village to close a mortgage loan?

How many people go to work for you when you get a mortgage?
Well, this number may be much higher than you think.  The obvious suspects are your lender and your real estate agent. 

Let’s add to that all the people on their team. In addition to your lender’s loan officer, there’s also their processor, underwriter, closer, doc preparation team and the post closer to name a few more you may not have known about. On your real estate agents team they may also have a closing coordinator.  There’s also the listing agent and their closing coordinator. Wow! 

We’re still not done. Let’s add to the list your home inspector, pest/WDO inspector and your home owner’s insurance agent and their team.  In addition, there’s the appraiser and the appraisal management service company. On average there are over 20 people working hard to help get you into your new home!

Why do I bring this up?  Well, embarking in the pursuit of the American Dream is not to be taken lightly, by you or anyone on your team. Be sure to choose your dream team wisely.  Do online research, such as Zillow reviews, BBB ratings as well as ask for customer surveys from past clients. If this information is not made readily available to you; buyer beware.

In addition, soon there will be even more people involved in the mortgage loan process.

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