I had a situation with a buyer in the past couple of weeks that had spoken to an internet lender they were not familiar with, to get preapproved to buy a home. This is not to say that all internet lenders are bad, however you must know who you are doing business with.
The buyer received a good faith estimate with an interest rate that was 1/2% higher than the going rate. And, the estimate had a $2895 mortgage broker fee attached to the loan! Ouch! There aren’t many buyers in this market than can afford a fee like that tacked onto their loan.
I always recommend buyers talk to more than one lender to be sure they are being quoted the best rate and terms on their mortgage. I also recommend they talk to a local lender, as they work in and understand the Brevard County Real Estate Market.
So, I recommended to this buyer that she contact another couple of lenders, here locally that she could speak to about getting a mortgage. She did. The first lender she talked to is reputable and has been working for the same company for many years. He advised this buyer that her ratios were too high and he wouldn’t be able to do the FHA loan for her at this time. He told her what she needed to do to fix her problem areas.
Both lenders were going to do FHA financing with 3.5% down!
She was completely confused as to why one lender told her it would be no problem to get an FHA loan and buy a house and the other lender told her that she needed to get some items on her credit in order, before she could proceed ahead. Well, I explained to her that it would be the difference between whether she would actually be getting to the closing and actuallly buying the house.
One lender is going to tell you upfront there’s no problems. He will collect upfront fees, the buyer will pay for inspections, credit report, appraisal, etc. only to find out that halfway through the transaction her ratios are not in line with FHA guidelines. So, then she will be denied, after she has spent a good bit of money.
The other lender played it straight from the hip. He told her right upfront, that there are things that must be addressed before she can purchase a home. He told her today she cannot qualify for an FHA loan. This lender will save all parties involved from signing a contract to purchase with a seller, paying exorbinant fees, and wasting everyone’s time.
Basically, the third lender she spoke with gave her the same info that the second one did. She would not qualify today to purchase a home today, until she cleared up a couple of issues.
Give me the lender that’s going to tell me today that it’s just not going to work out for the buyer right now.
And, stay away from the shady internet scammers that are still making their monies off of upfront application fees.
She has decided to address her issues immediately, and hopefully will be back in the market, after talking to a local lender, within the next 6 months.
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