Preliminary Documents, Contract and the Sales Rep from Hell

I spoke with the new lender early this morning. He said everything is looking awesome.

My wife and the realtor met me over at the builder's model home/office to go over the contract and all of that preliminary stuff you have to go through. I asked a couple of questions that really fired up the sales rep.

I don't know what her damn problem was. She was very short and it was escalating so I snapped her back into line with a simple statement, "Look, we're just asking some questions." We hadn't seen a model of our house yet, and wouldn't for a few more days. In fact all we had seen was the office we were in with her and a few brochures that she had emailed to me. With a sample question of would we be able to add things like an extra plug outlet, she snapped "NO!". She was very defensive, abrupt and just right out rude.

I figured out some of it later on. She was upset that we had brought the realtor with us, she was using a PC, and her printer was giving her fits. I didn't care what her reasons were but she didn't have to be so rude.

Anyway, she was super fussy and in a hurry for us to sign. I had to get assurances from her that I would have more than the time in her office to read everything in the contract. She was sort of resistant with comments like take it or leave it. The realtor was able to intervene and get an answer that the contract would not be submitted to corporate until next week.

I pulled my wife and realtor aside so we could talk in private about the sales rep's overall attitude and the bad impression that she was giving us. We were encouraged to look passed the attitude she was displaying.

The realtor had to leave early to honor an appointment and my wife needed to get our son home for lunch. I stayed to finish the paperwork and try to warm that old lady up. In the end she had lightened up quite a bit.

The sales rep gave me a sold sign to stick in the yard. Here's a photo of that.

Enough on that! We have to go to decide on all of our color options by February 1. I booked an appointment with the place that provides that service for January 27.

I spent the late evening going through every document to read all of the applicable fine print. Everything seems to be ok. I have a question about a couple of small things. I just have to wonder if my questions will bring out the fangs again. Time will tell. Time will tell.

The Fat Plat

I contacted the home builder this morning to let her know that we are interested in one of the lots and we want to secure it as soon as possible pending it is facing the correct direction and is as appealing in reality.

The realtor wanted to meet everyone at the builder's site in the afternoon but I didn't want to wait that long. Then, we found out our builder POC has the next two days off. She did get back with me to let us know that since it's a corner lot we can face either street North-West or North. One other thing the realtor told us about was that this particular builder will put 1% of our base cost towards closing charges. They have an additional incentive today to add another 2% off the base cost of the house.

I told her we could wait to meet in a few days but I want to secure the lot today. She confirmed that we could do that. So, I drove home to pick up the wife and kid and we drove over to see the lot. I had Fiona get out and put a compass on it to be sure she was happy with the direction.

Everything worked out. We drove around the corner and placed a deposit to hold the corner plat that we like so much.

While we were there, we were given their preferred lender contact details. When I got back to work, I called this new lender for instructions and did the online application.

So, that plat is being held for us. I'm going to try to get at very least a pre-qualification letter from this new lender so that we'll be ready should we decide to get a contract down.

Now let me talk about this fat plat. I'm calling it that because the lots in the same area and same price are skinny. I used two methods for measuring the difference. The first was Zillow and I don't know how reliable it is. They claim our plat is 155% larger when compared to the surrounding plats. I did my own measurements from satellite photos and some geometry. I cam up with 187% larger when compared to the surrounding plats.

In either case, the extra space and it being a corner lot will make this plat very desirable in decades to come.

I am eager to see what rate this new lender can get for us, because the first lender seems to be high for our situation when compared to the average market rate.

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)

Execute Rapid Rescore Process

I received a faxed confirmation of a zero balance from a creditor that was giving me problems.

The confirmation letter was sent to the mortgage lender.

She said, she can get the blemish removed from my history and do a rapid rescore. Rapid Rescore is not commonly available to all lenders.

In about 5 days, we should be able to see an increased score. I would be interested to know how this lender's rate compares to other lenders if they were to evaluate me?

Time will tell.

I'm thinking it would be better to wave for another 6-9 months. I think the time would go by fast.

Milestones:
Halloween
Thanksgiving
Wife's birthday
My birthday (3 months Major Milestone)

Christmas
New Years
4 year wedding anniversary
Tax Season
Lunar New Year
Valentine's Day
1 year anniversary at new job (6 months Major Milestone)

Vietnam trip
4 year anniversary at our current apartment
Easter
Our son's birthday (9 months Major Milestone)

An Old Score Settled

Today, I took on an old dragon that I thought would never wake. I didn't want to wait any longer to find out if he would.

I negotiated an old debt down to a 55% of the original. I got it and used a portion of my intended downpayment to pay it off in one lump sum. I was given the confirmation number. But the confirmation letter showing a full payoff with $0 balance will not come until the next business day.

I tried to get them down to 30% but they said they could only do %60. I was a little pushy and got the manager to lower it another %5. I'm happy.

I asked them if they do deletions but they do not. The mortgage lender volunteered to handle the details after I get the confirmation letter. They told me it should take about 2 weeks to clear everything up.

I guess the question on my mind is, shouldn't I wait for a while and let my credit score improve so that I can get a better interest rate?

My wife and I are prepared to continue to save, let our score improve and take our time with all of this. The management coming down and fixing the a/c today has helped our patience.

In the end, it is a nice feeling knowing the dragon has been slain if nothing else just for the peace of mind.

By the way, I found the missing W-2 form I was looking for during lunch yesterday.

Request for Evidence of Income

The mortgage lender requested the following documents today:

• W-2 forms for the previous 2 years
• Federal Tax Returns and Business Tax Returns (all pages) for the previous 2 years
• Pay stubs for the passed 30 days
• Passed 2 months bank statements
• Driver's License
• Social Security Card

I had everything together except my most recent W-2. I contacted HR and they sent me a form which I filled out requesting a reissue of the most recent W-2. I'll forward that to the lender as soon as I get it.

Another thing they are doing is verification of employment and salary which is kind of mixed together with the documents requested above. Fortunate for me, my company already has a good reputation with this lender and have a portal set up solely for this purpose.

There were some other things they requested if applicable. Not applicable in my case. But those items are listed below.

• Current mortgage statement and insurance declaration page
• Retirement statements (most current)
• Award letters for social security/retirement income
• Bankruptcy schedules/Discharge docs
• Divorce decree (all pages)
• VA: DD214/Disability Awards Letter

Credit Check Cleared

Apparently the credit check was indicative of greatness. The lender requires some additional paperwork to complete the pre-approval process. I'm waiting to find out what paperwork they need.

Running my credit

So, I've chosen RE/MAX as my realtor. They called me and referred me to a lender. I was advised that it may be a good idea to avoid the huge banks (the untouchables). So, I have spoken with this smaller lender and they have enough of my information to find out how much house we can get.