1. Purchase borrowers are the most likely to be taken advantage of in a transaction by some bait-and-switch lenders because the borrower is on a deadline.
a. Make sure you get ALL quotes in writing! Nothing else matters. Too many times we have seen borrowers get a quote from another lender only to be switched right before closing and by that time it is too late to do anything about it.
b. Make sure your loan has been seen by an underwriter BEFORE you sign a contract. Most lenders give you a preapproval that is worthless, it just means the originator thinks he can get the loan done. Only underwriters can truly determine your eligibility for a purchase. Southwest Funding is one of the few lenders which allow you to have your documents reviewed by an underwriter without a contract.
2. Make sure you FULLY disclose how you receive your income. Bonuses, commissions, and overtime, are all calculated differently and are not part of your base income. Some lenders won’t even allow you to use this income so you won’t find out until the very end that your preapproval is now a denial.
3. Getting the cheapest price for a home is not always the best thing. Sometimes it is getting a good price with the most seller’s concessions you can so you lower the amount of cash you need to bring to closing.
4. Understand you will have unforeseen costs of owning a home. Lawn maintenance, new furniture, and updates are just a few things to keep in mind when budgeting.
5. Make sure the property taxes on the home you are purchasing are based upon your age and the actual improved value of the home. All too often, we see borrowers who closed their loan somewhere else and come to us to refinance because their payments shot up due to a shortage in their escrow account.
6. Have fun! Purchasing a home should be exciting not dreadful.