After watching these episodes for a few years, I was on the lookout on my most recent closing. One of the first estimates that was sent out was missing $1500 lender credit. I’m glad bigger pockets is such a great resource to make sure these things are accurate. Great episode.
With a recent purchase I made, the lender decided to just put in the loan estimate only 3 months of home owners insurance instead of the full 12 months, causing a BIG shortage in my escrow account at the end of the year, as it calculated as my insurance for the following year to be $0, raising my mortgage payment drastically. Had I seen this video before this would not have occurred while analyzing the deal, safe to say I will not be working with the lender again. Thank you for the helpful content!
I have definitely seen it happen. Although it is important to note that the escrow shortage could also come even when a loan officer does his job perfectly, as your insurance or taxes can increase after the closing. But still needs to be double checked!
I've had appraisal fees come in as much as $600 different per lender. That can be significant for the low cost homes I purchase, so I challenge that fee if the other fees and interest are the same
Great explanation, guys! One area that I would like some better education on is how to understand and use things like seller credits and money used to buy down interest rates and how to negotiate that into the contract. Thanks
We did this a number of episodes back! Happy to answer any specific questions as well. We have a number of Q&A episodes coming in the future directly answering youtube comments!
Great Video. I am in the process of making my first bridge loan to a homeowner in Virginia Beach to get her funds to buy another home while she lists hers. This was so helpful !!
Thank you Christian and Dave, amazing video! Is there an interest rate (APY) for the impound account, as it accumulates T&I during the year? At current interest rates, it would be more beneficial to pay the expense once a year out of pocket from a high-yield savings account otherwise. Thanks!
Am I misunderstanding? Are you saying that the insurance cost will be the same no matter who gives the mortgage? Because I shop for insurance and get a lot of different rates from different companies.
I purchased a house in Florida in May 2021 with Cross Country Mortgage. The house was valued at $320k but he (seller) is a family friend and sold it to us for $160k... We put $80k for the down payment and given a 3.25% interest rate. I was shocked that they are charging us PMI. I though that if you put 20% for a down payment, we no longer had to pay for PMI. When I question the loan officer a few days ago as to "when" I can have the PMI removed. She told me it's staying on until 2032! Apparently FHA guidelines are 11 years no matter what the down payment is (at least that's what she told me)... Does this seem accurate or were we scammed?
FHA loans require MIP for the life of the loan and commonly are used for small down payments (3,5,10% etc). Considering your large down payment, without knowing more details about your situation, it might have made more sense to purchase a conventional loan so you wouldn't have had MIP from the get-go. That's water under the bridge now though, and no point in refinancing out of your low 3.5% FHA loan considering current interest rate conditions.
100%. I cannot speak for your loan officer as there may have been some need to go FHA vs conventional, but ABSOLUTELY a conversation about the PMI and the negative impacts it could have long term should have been discussed!
Points are the cost for 'purchasing' your rate. The lower the rate, the more 'points' you pay. For reference, a point is 1% of your loan amount. Extended lock fees can happen in the event you had to postpone the close of your escrow past the lock period that was made early one (usually 30 days). Although many times working with a broker will not lead to an extension fee. This is because, for lack of a better word, we build up 'brownie points' with many lenders to get free lock extensions and other perks that we can pass onto the borrower for savings.
