Money Talks…Lenders Walk

We have been following our first time home buyers as they dip their toes into the waters of finding a home. Murky waters, indeed, but so far not dangerous. Not so the next step: dealing with the lender.

First of all, which one? There are banks, savings and loans, mortgage brokers, credit unions, on-line lenders, national banks; even Walmart is vying to get in the game now. Compare-Apples-to-Oranges2-150x150

Then when is the right time to contact them? And how many? You don’t want to have them all run your credit history too many times or it might lower your score (or so you have heard). Your tennis buddy has a friend who can get “a really low rate”. Can he really know that if he does not know your financial health?

No, he can’t.

To really compare lenders’ programs, you need them to give you the same data in the same format as of the same day. Tricky? Yes.

And why do they demand so much personal information? Is it really important that they see your bank account statements for the last 3 years and right up to the minute of closing? Why? Did someone say that if you open a new credit card account the day before closing the lender might pull out of financing your home sale? Could happen.

If you are married, will a lender give you a better rate if the note is signed by the one with the better credit? Is that legal? Can both people own the home? Some lenders dictate that the married person who is not obligated on the loan waive rights of ownership under certain circumstances. What happens if the payments are not made? Can they take the house?

After you give them all of your information, including your pay stubs, your loan balances and your first born child (no wait, that is hyperbole), they issue you a letter that says something like this:

“We, lending institution, agree to loan you X% at a rate of X% IF your home appraises. And by the way, the appraiser may be from the other side of the state and completely unfamiliar with your lovely neighborhood. Then, if we decide to do away with this loan program or if you get laid off or if you have a drop in your credit score, or if you have an unexplained deposit into one of your accounts (like you sold some stock, for example), or if you tell us the truth about what repairs the seller agrees to do after the inspections, we will just refuse to loan you the money.”

Try relying on THAT. And there appears to be NO RECOURSE for buyers subjected to this type of treatment. Why? Because lenders HAVE THE MONEY. And residential commitments are not true commitments like the ones the commercial lenders issue. Those are real contracts with real rights and real teeth.

Then there is the timing. What a nightmare! The sellers want to close in 75 days but the lender will only commit to a rate for 45 days. Or you commit now and lock in but then the rates drop and they tell you it will cost you 1% to float down to the lower rate.

stop Let’s stop here and observe a few things.

• Perhaps the most important decision a buyer makes in the process is what lender to use

• Buyers should get pre-approved by a good lender that they trust and then SHOP that deal after they have gotten through the inspection process.

• Agents need to be well versed in lender lingo and tactics so they can guide their buyers through the maze of lending practices and avoid the many pitfalls

• An agreement of sale has only a few areas where a buyer can default, but failing to apply for the mortgage that was stated or not providing the mortgage commitment on the designated date are two of them and either one can cause a loss of deposit.

To get the right answers you need to ask the right questions. Visit Choosing a Lender for a comprehensive list of what you need to know about a lender.

To avoid these issues and others when buying a home, use the services of an experienced, trustworthy exclusive buyer’s agent. Sage Realty is one of the ONLY exclusive agencies in the Philadelphia metropolitan area. Even if you are buying in another market, ask us to refer you to the best EBA in that area. If you are a first-time home buyer, your fears will be eliminated. And if you have bought a home before, you will have a completely different experience. Contact Sage today.

Featured Testimonial

I moved to PA from Washington State and learned that realty is local. There were things that I thought I knew about buying a house previously but boy was I wrong. Linda was very patient with me but also did not hold back when she saw potential problems, and always made sure I had all the information I needed before making a decision and didn’t belittle concerns to just get a sale. Above all else, and this was the most important thing to me, Linda has a high ethical standard, is very transparent in her approach and is someone I trusted making one of the biggest decisions of my life. – A. Lindsay (Courtesy of Google)

 

Hear From Our Clients

  • "We were so pleased that a co-worker recommended someone in the area that she trusted. Boy, did we strike gold on all counts. You are amazing!"
  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
  • "Linda and Tracey really know the Main Line area."
  • "Throughout the entire process we never doubted that she always had our best interests in mind. We wouldn’t consider anyone else when buying a home on the Main Line."
  • "From start to finish, Linda brought to bear a most helpful combination of experience, knowledge, attention and integrity on a somewhat complicated transaction. There was never any doubt that she represented our interests."
  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Hear from our Clients

  • "We were so pleased that a co-worker recommended someone in the area that she trusted. Boy, did we strike gold on all counts. You are amazing!"
  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
  • "Linda and Tracey really know the Main Line area."
  • "Throughout the entire process we never doubted that she always had our best interests in mind. We wouldn’t consider anyone else when buying a home on the Main Line."
  • "From start to finish, Linda brought to bear a most helpful combination of experience, knowledge, attention and integrity on a somewhat complicated transaction. There was never any doubt that she represented our interests."
  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Sage Buyer Tips

Use Sage Buyer Tips to research the Main Line and stay up to date on real estate news. This online destination is chock full of resources for buyers and sellers: you can see our Main Line communities or explore Sage favorite places. Browse properties here and search other Main Line real estate. With Sage’s advice and experience, first-time buyers and those looking to upgrade can find homes best suited to their needs.