Helpful Tips for Buyers 

Pre-approval? Why do this? Does it really help?

    I recommend that before you begin your house hunting, or selling your house, you need to begin the loan pre-approval process. This is a must and you can go to any lender you choose. Getting pre-approved requires that a lender verify your financial information, and it serves as their commitment to lend a specified amount based on the information you provide to purchase your new home or before you sell your old home. Sellers....If you list your house and it sells the same day, (THIS DOES HAPPEN!!!) and you accept the contract, what are you going to do if you can not finance your next home? This will eliminate a number of issues if you talk to a lender first. Some advantages of doing this are as follows:

      First - When you do find a property, sellers will take your offer more seriously given that you have a lender that has committed to backing your offer, and shows you qualify for the amount you offer.

     Second - It does give the assurance that you're looking at homes you can confidently afford to finance. Your efforts will be focused on properties that match your financing abilities. This will eliminate problems and heartaches when looking for your dream home and sticking within your limits. For example, you found the home of your dreams, and you can’t wait to buy it.  After you write an offer on the house, you find out from the bank they will only lend you $185,000.00 for a home. Precious time has been lost, and the other homes that are in your price range may be sold. 

        Third - You will have an edge over other buyers who aren't pre-approved. In situations where there are multiple offers on a property, this can be the difference between having your offer accepted or losing the property to another buyer, which does happen. Let’s say you are the seller.  You have your home listed and you get a perfect offer on your home, then you find out seven days later that they could not obtain financing? By the time you find this out, you may have lost the buyers who actually had the purchase power to buy your listing. The other buyers may already have an accepted contract elsewhere. I always say “Knowledge is they key to success.” 

 Lenders Secrets? Yes, most of the lenders do not want you to know about......

   The wrong or right decision when signing your home mortgage loan can mean thousands of dollars saved or could cause unnecessary interest paid over the life of your loan. There are very many important factors to consider before you commit to a 15 or 30-year note, an adjustable rate mortgage, a balloon note, or any other loan program presented to you. For many buyers, our mortgage payment is the most important financial decision we’ll ever make. No one wants to struggle making payments or pay extra money at closing. I think it’s really important to learn and ask about the financing of our home. Take the time to investigate all of your options and avenues before you decide what bank to choose or what loan programs you are going with to purchase your home.  I know it takes time, but it‘s the time we need to make the right decision that will affect our life and life style.

   Believe it or not, I found out that many people sign the first mortgage program placed in front of them without asking any questions at all. I hear all the time; “ I was told this is the best they can do for me!” Or the loan officer said, “ I had to really work on this to get this loan for you", or "you can not buy a home at all! Take it!” I hope you can avoid any mishaps, and save money in the long run. A real estate agent usually has established relationships with the top lenders in your area and knows a lot of loan programs. By finding yourself with a professional agent, this can ensure you that all the financial steps are taken care of properly and can make a world of difference. This is why I also tell people to find a good agent that knows about mortgages and loans, and have several loan officers that know the new and ongoing programs available on the market for buyers.

   Find an agent that knows Lenders -
    I found out over the years that some lenders are flexible with the real estate agents who have done business with them in the past. They get a relationship going and they help each other out with referrals, and work closely together on each client to ensure things go smoothly and in line. Some lenders depend on agents for their business, and some agents depend on lenders for theirs. The lender takes care of the agent's clients and the agent sends them more referrals. The agent depends on the lender to give the best deal to their clients so they will get referrals from their buyers and sellers later. The wheel keeps spinning. If the lender is not taking care of the real estate agent or the agent’s client, the real estate agent will go elsewhere with their clients.  The lender and agent work effectively together, referring each other business. That’s why a good agent can make a  substantial difference in setting up the most economical financing. Utilizing an agent with knowledge of loans and loan programs can really save you thousands and thousands of dollars over the life of your loan and at closing.

   Paperwork should not be done alone -
    The paperwork required to be completely filled out for purchase of a home can be a headache for a homebuyer. I have seen this over the years and hear all the terrible stories like, “I can not believe all the paperwork needed for a home and what I had to sign!” Or “I don’t understand what I’m doing or signing?” The only thing you have to do is ask your lender to help you, and explain what they are doing and what you are signing. Then ask your agent! Your agent can review what is going on and verify everything is alright. Most agents will call your lender with you and have them explain everything. That’s why it’s really important to have a good real estate agent on your side. Real estate agents are concerned about your well being, just ask! Now you have a support team to help with any stressful issues. Don’t forget your insurance agent either. They are a great help as well! Everyone’s expertise and knowledge will help to dissipate any stress and take out the fear factor before you sign your mortgage and any paperwork. Now you will have confidence in what your are about to do.

   Options- look at them all before you sign! -
    I always ask the buyers, “Have you seen at least 3-7 loan programs for your mortgage before you chose this program?“ The reason for this is, you may find that some loan programs may be better than what you are going to receive. See some lenders make more money on certain loans than others! That is how they make their money and bonuses. Most lenders will have a list of programs that you may qualify for, but may not be suited for you, or do they? You will not know unless you ask and see what other loan programs are out there. Some loan programs may have grants that are forgivable after a certain period of time, or some programs may have better terms that may work better for your lifestyle or your plans. You should ask your real estate agent to work with you and your lender on deciding what is best for you and your circumstances. Check out all of your options.  After all, it’s your loan, your payment, and your money.  Your loan should suit your needs, not theirs. 

   What about communication?
    Please, please, please.... Remember you are the client!!! If it was not for you, the lender would not make any money, nor would the agent. They should make sure and follow up with each other to ensure everything has been taken care of, and nothing is being left out or skipped over during the loan process. I, along with other agents, have had so many problems ordering appraisals, title, and many other items. It happens! Many lenders are so busy, and have so many people they are working with, things get overlooked or forgotten.  Some lenders have more than one person helping them with each loan they have in process.

  Some lenders will tell you that they do have a loan processor and refer you to talk to them. Do not let them pass or shift the blame if something happens! Make them find out why any issues have surfaced and why something is not done.  Make sure you loan officer takes the responsibility  to correct the issue at hand. I have known of people that lost a house due to this. Do not be a victim. Make sure to stay on top of things and check with the lender throughout the whole process. Some lenders, UPON REQUEST, will provide you a written statement on how the loan process is going and what’s left to do to close the loan. That is called the stip sheet.  The stip sheet is a checklist, which is required to be completed before the loan can close. It may show things such as order title, order appraisal, need more bank statements, recent paycheck stubs and so on. Some lenders will disclose a copy if you ask. ASK, this can help you, along with your real estate agent and lender to perform the outstanding tasks needed to close the loan. It’s up to you to help the agent and lender with all information that is required from you.

  Negotiate  -
    Don’t just accept the terms the lender may present to you. Lenders are in the business of loaning money and making money.  They do want your business! Like I stated before, make sure you check out all avenues and make sure you examine every option available to you. See more than one loan program and ask why it is right for you. If you negotiate on any loan, get it in writing! Especially on variable rate loans or arm loans. Some lenders have the ability to lock you into a fixed loan if the rates start going up.  However, some may not tell you this due to fact that they may make more money by selling a certain product to you!  Make sure that you understand exactly what is being offered to you. I, like so many other agents before have seen buyers that are told one thing in the beginning, and by the time they arrive at closing, the loan or terms are different. Examples are a fixed rate in the beginning that may end up an adjustable rate mortgage at closing, or no pre-payment penalty, but at closing they have a 2-5 year penalty if they pay extra or pay off the loan early. Get everything in writing!

   Well the lender told me they could not help me?
    We have all heard this before! Lenders and banks have different guidelines to lend money to homebuyers. Also, check with another lender or your real estate agent for help. Don’t give up or give in to a lender.  There are so many ways to purchase a home.  Some lenders may have less strict guidelines, but it may cost you more money at closing or you may have a higher interest rate. ONCE AGAIN, check all options.  Some lenders will tell you after 1-3 years you can refinance your loan. Make sure you can, and check to make sure there is no pre-payment penalty in doing so! Always get everything in writing!

  Knowledge is the key to success -
    An old friend always told me, “Knowing is half the battle.” It’s true, educate yourself! You will be better off and then you will know what is going on and you can take control of your buying experience. Your lender and your agent will help you through the process.

   Remember this, even if you can not purchase a home right away for whatever reason, a good realtor will stick by you and help you to achieve your goals and dreams.  Remember, if you are treated right, hopefully, you will recommend them to others, don’t forget the wheel.
 

Email: Chris@ChrisSchlager.com

"My Dedication Makes Your Dreams A Reality!"

    For information regarding residential homes, land or farm listings, and current real estate market conditions in the South End, Valley Station, PRP, (Pleasure Ridge Park), Shively, Auburndale, Fairdale, Iroquois Park, Buechel, Highview, Okolona, Fern Creek, Hikes Point, Bullitt County, Hillview and Spencer County, Taylorsville Lake area, Mt. Washington Kentucky, (Ky) state, I can also help you negotiate with *For Sale by Owner-FSBO's to get you the best deals on the residential market.  

    *Keep in mind that with For Sale by Owners-FSBOs homes, Kentucky State law does not require seller disclosures forms to be used. They are definitely considered "Buyers Beware Properties."

 W. Tom Huber Realtors, LLC
3400 Historic Drive
Louisville,  KY 40299
Office: (502) 551-6386
Direct Line to Chris: (502) 777-9027

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