Jerry tells us a story that all our buyers need to read. On line banking can put on a great face, but buyers, this is a huge purchase and needs to be given full attention, in every aspect of the transaction. Make sure you are making a wise choice when choosing your mortgage officer. (and Realtor)!
Buyers need to be careful and cautious when applying for those online Pre-Approvals, especially those which are out of the state when you are making your home purchase. Every state is different when it comes to real estate, and even financing options may vary.
I normally recommend to all my buyer clients a mortgage broker, or loan officer, who is not only licensed in Texas, but is very knowledgeable about financing options as it applies to purchasing real estate in the state of Texas. Over the years, as agents you find preferred lenders, whom you feel confident in recommending to your buyers, since you have built a good relationship, and you know what that mortgage broker can do for your clients.
But from time to time, we all meet buyers, who have been Pre-Approved from another source, and as agents may agree to work with those other lenders. Recently, I had a buyer client, who had received one of those Pre-Approvals from an online source, and we proceeded to make an offer on a home that the buyers loved. Once under contract, the mortgage process began ordering the title commitment, an appraisal, and completing the loan applications with all the required income tax and bank statements for proof of funds. The loan officer assured us that everything looked good, and we only had to clear a few underwriting conditions. After the buyers completed that First Time Home Buyer’s Course, and received their Certificate of Completion, and all those underwriting conditions had been met, we were sure that we will would get that “Clear to Close”.
Then late Friday afternoon, I get a call from my client saying that his lender just called to tell him that his loan had been denied due to property taxes. I knew that couldn’t be right since the very first thing loan offers do is to verify the buyer’s income and debts, after the credit report is pulled. I immediately called the loan officer, who had been working our file to get a better understanding of what caused the denial. It was all about the debt to income ratio, and my client was over the 43% for a VA Loan.
Apparently, the loan officer had used a lower property tax amount when originally qualifying my buyer. After recalculating the ratios with the correct property tax information, it gave my client a much higher mortgage payment, which caused the loan denial. It is well known that Texas has high property taxes, since there is no state income tax in the state. Our property taxes in Texas can raise your monthly mortgage payment by $200 or more, because the average property taxes without any exemptions is normally around $2400 for a $100,000 home.
This can be a costly lesson for any buyer, who has paid out earnest money, inspection money, and appraisal money, and get denied a loan a week prior to closing on his Dream Home. Therefore, Buyers Be Careful and Cautious whenever you use those online lenders that promise a fast Pre-Approval. Those lenders need to know and to understand how to calculate accurate property tax information for the state which they are providing loans. Remember, your Buyer’s Agent will normally recommend a preferred lender that he or she have come to know and to trust their clients with.
Your Military Relocation Specialist "Serving You For All Your Real Estate Needs"
Buying, Selling, or Relocating to the Greater San Antonio, Bexar, Guadalupe, Comal, Medina, Wilson, or Atascosa Counties?
Jerry Newman, MA, REALTOR®, ABR®, GREEN®
US Army Retired
Green Home Realty
9901 IH-10 West Suite 800
San Antonio, TX 78230
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My name is Cindy Edwards and I am a Realtor in Tri-Cities Tennessee. We have a very successful Team concept that has something for everyone. If you are looking to buy or sell in Johnson City, Bristol or Kingsport Tennessee, you have made the right stop here! Please visit our website that is about the surrounding area of the Tri-Cities and helps you realize what a fantastic place this area is to live. Tri-Cities is close to some very popular areas and boasts Mountains and lakes!
We have a full time photographer, handyman, web marketer and client care manager on our team. As well as a buyers agent and I myself specialize in listing and selling YOUR property. Please visit us on the web and let us make your next home buying or selling experience a positive one, you'll remember for years! Or goal is to have you come back to us