MEETING WITH A LENDER

When you are looking for a mortgage loan, it is important that you find a lender who will work with you to meet your needs.  The right lender will help you with pre–approval, which gives you more of an advantage when shopping for a home.  You should know up-front how the lender would evaluate your application.  You should also be aware of predatory lenders and how to protect yourself from being taken advantage of when looking for a mortgage loan.  You can get a mortgage from many different sources, like mortgage banking companies, commercial banks, community banks, credit unions, mortgage brokers, and other financial institutions.  To find a lender you can contact your bank or financial institution.  Ask family members, friends, and co-workers.

When shopping around for a mortgage, question every fee and ask if it can be waived or negotiated.  Most mortgage lenders have your best interests in mind.  However, there are “predatory lenders” this type of lenders usually reach out to people with less than perfect credit, and people who know very little about home loans and mortgages.  These lenders usually tell you that you can get loans with very low monthly payments, refinance your existing mortgage, or take out a loan or second mortgage to help pay for expenses like medical costs and home improvement work.  They usually offer loans with high rates; broker fees; unnecessary costs like pre-paid life insurance; and unaffordable repayment terms.  Be suspicious of anyone who offers you “bargain loans”, whether they mail or e-mail you an offer, call or come to your door.  Avoid promises of “No Credit? Bad Credit? No Problem!” and beware of offers that are only “good for a very short time.” Avoid lenders who encourage you to borrow more than you need or more that the value of the home.  Beware of terms that change at the last minute or offer next-day approval based on prepayments or up-front fees.

Source: Freddie Mac: Working with a Lender; How to Avoid Predatory Lending

Key Items to Pay Attention to on Your Loan

Closing costs including: origination fee, points, pre-paids, title fees & lender fees.
When you have your “rate locked” by a lender, you MUST have that in writing from the lender.
You will need to provide the loan officer with all documentation in a timely manner for the loan to be processed on time.  Failure to apply for the loan by the “Loan Application Deadline” in the Buy & Sell Contract may cause your earnest money to be forfeited!
Get a Good Faith Estimate (GFE) from the Lender/Broker.
By Loan Conditions Deadline, you will need, in writing, that your loan has been completely processed, through underwriting, all conditions met, and that you are clear to close and fund, meaning the lender can get figures to the title company.

Buyers need to be very careful of who they choose to handle their loan.  If an interest rate seems too good to be true, it might just be! Be smart and ask several questions so that neither your real estate transaction nor your earnest money is ever put in jeopardy.

Colorado is a table-top closing state not an escrow state.  Your loan must be funded at the closing table.  So be careful if your lender is out of state.

When applying for a mortgage any large purchases or purchases on credit cards could change your credit rating and effect you mortgage.  Don’t buy a car, furniture, or furnishings until after closing.

Earnest Money

When you write an offer, usually 1% of the purchase amount is required when submitting the offer.  You, the buyer, will write a personal check for that amount.  You may also put that amount towards your down payment or to pay for closing costs.

*Note: The earnest money check will be cashed once the offer is accepted by the Seller.
and
If buyer is in default of contract, this money may be given to the Sellers!

I always strive to give the very best service to my clients and customers.  I need you to know that I cannot recommend the lender that you will be using.  To do so would make me liable for their actions.  I therefore will give you names of several lenders.  You are not limited by these names but may hire any lender of your choice.  Make sure you are satisfied with the credentials and competence of the lender you choose.  You make the final choice of lender.