Realtor Interview #2

It's been about a month since we first started our journey toward buying a house. I had met with the realtor initially on September 17. That was the seller half of the realtor.


My family met his wife, the buyer half, today. There was quite a bit covered in that meeting this afternoon. I will post my meeting notes in the next entry.


UPDATE
I had meant to add my notes from this interview previously. See below.


Lender will give itemization of fees in the closing costs.

Process:

1. Up front cost (earnest money $1000 up to 1% of house sale). Option fee $100 paid to the seller for unconditional right to cancel contract 7-14 days, pay for home inspection during the 7-14 days


2. Promptly after entering into a contract to buy a property and before any option period expires, contact your insurance agent to determine the availability and affordability of insurance for the property


3. Once you have a contract on the property, realtor takes contract to lender


4. Home needs to be inspected before appraisal - Home inspection #1 and termite report #2 $350-400 (this is not the home value appraisal)


5. Lender processes contract and orders appraisal which takes a few weeks - Appraisal runs about $450 usually paid to the lender up front after finding a house (but may only be due at closing)

Establishing Credit for My Wife Who Has None

I have added my wife as a cardholder to 2 of my credit cards. Some banks charge a fee for this, some don't and some simply don't allow it. My 2 cards allow it and charge no fee.

She will get the benefit of my history with these two cards that report every 30 days.

90 days later we will set up a card account with Macy's who also report every 30 days.

The key to all of these cards is to charge 10% of limit and pay off each month.

Finally, we will establish an additional type of credit by opening an account with a store like Conn's and follow the same concept. I was told with a place like Conn's to carry the debt for about 6 months, 10% of limit and there will be no fee within that time frame.

The chances are small that any of this will be considered in our house hunt. I'm documenting it in the event that we don't buy for 6 months or more.

Pre-Qualification Letter, Disputing Credit, Additional Documentation

I wrote a letter of explanation on why I was out of work for a few months in 2012 and submitted that along with copies of my wife's ID to the lender as requested.

The lender sent us a pre-qualification letter and introduced us by email to a realtor. The realtor happens to be the wife of the realtor I spoke to in the beginning of our journey.

Additionally, today I set up an account with TransUnion, but didn't see a place to set up an account with Equifax or Experian. I opened disputes for an account that shows a zero balance but is still negatively affecting my credit score. I'm not disputing that it's mine, I'm disputing the balance, the validity, the lack of supporting documentation. Since their is nothing to collect, no one will pay to send someone to hunt down documentation on the collector's behalf. After they have neglected to respond within 30 days, it will have to be deleted. We shall see.

First Proper Lender Meeting with the Family

Today, my family had a proper meeting with the Senior Loan Originator. A lot was covered. (See notes below)



In short, we have a bit of homework to do, some time needs to pass and we'll meet again perhaps in a few weeks. I have to write a 'Letter of Explanation' why I was out of work for a few months back in 2012, provide some of my wife's ID to move the paperwork along.



Additionally, I have to take additional steps to get something removed from my credit history. It's a paid off account that needs to be deleted. The original owner will not delete it. I will document that process as well.


NOTES

Let the realtor locate a house

The lender does a conventional loan with a minimum of 5% down.

The lender will ask seller to pay 3% toward closing costs and negotiate that into the lender's price (we would have to pick up the remaining balance)

Get into a house sooner than later because the after tax benefit of owning a home outweighs waiting and saving more money.

Any additional funds that you have after putting 5% down that you want to apply toward the mortgage, do that until you can get to 80% of the original sales price then the mortgage insurance piece will fall off and then your payment will even be lower. Then, take the portion that you were paying towards PMI and start paying down on the ‘principle’ (the snowball effect). The sooner you get to a balance of 80% of the original sales price, the sooner you can start applying the PMI fee toward the ‘principle’.

Establish accounts with Equifax, Experian, and TransUnion if anything needs to be disputed on all three bureaus.

Future Process:

1) Lender will get us a Pre-Approval Letter

2) We will locate a property

3) Negotiate contract/negotiate terms

            a) negotiate seller willing to pay closing cost

4) Give Lender a copy of negotiated contracts

5) Lender will work up the numbers and determine if they want to lock in an interest rate

6) Property Inspection, and condition of property is acceptable by your terms

7) Lender will order the appraisal

8) Once appraisal is completed, it will be sent to underwriting (72 hour process)

9) After underwriting approves, lender draws the closing documents and send them to the title company here in town

10) Title company will prepare the settlement statement and all of the numbers

11) Seller and buyer will sign papers

12) Lender will send a wire to fund the loan

13) Exchange of keys

**Lender guarantees a 25 day closing from the time you have your contract

 

Lender needs to have a credit card on file for appraisal $400 fee is charged at closing or upon cancelation

Winter months are historically better rates (research online if you want)