Mortgage broker is selling us a home - HELP!?
We know a mortgage broker that is also a builder and a friend of the family. We went to him to get us preapproved for our mortgage loan, etc. After telliing him we were having trouble finding a home we REALLY liked he said that he had a home for sale on the side of town we were looking at and that we could look at and if we liked it we could work something out. We looked at the home and LOVED it. Now we are in the position where not only is he working out our loan, he will be selling us a home. We are first time home buyers and very cautious as to potential errors we could make and what type of gain he is getting from doing all of this? We really don't want to be screwed but we don't know enough about all of this to know the difference and I'm afraid he will take advantage of that fact. Any advice? Any questions we should be asking? He has told us he will pay all closing costs, get us a 5% - 30 yr fixed rate, no points. Any advice is GREATLY Appreciated!
- 1 decade agoFavorite Answer
The loan terms are good. 5% at 30 years is strong and him paying closing costs is good.
The main thing I would be worried about is home price. He knows what you are approved for, so he knows how much you can pay. I would maybe your own Realtor or even an appraiser to verify the market value on the home.
But working with these types of people in my job, they are in a position to take advantage of you, but if you find an honest person, they can also get you a great deal. Because they do so much themselves, they can make concessions on certain things because they are getting so much of the deal that normally get's spread around when different people are doing everything. I have a few clients that really give some people some sweet deals, but they are very honest people and have great reputations.
So yes, he is in a position to screw you over, but it doesn't necessarily mean he will. Just check on the value and condition of the home and that should put your mind at ease a little bit.
- loanmasteroneLv 71 decade ago
The best thing you can do for yourself is ask questions of things you are not sure of. Even if these questions appear to be of little importance to you they might save you money in the long run.
Failure on your part to understand certain features of your loan might cause you problems in the future. Remember that once you sign your loan docs you are now a home owner with a monthly mortgage due each and every month.
After signing loan docs it is too late to say I did not know what I was signing and did not understand the docs I signed.
You should be given 2 documents after signing your loan application. One is a Good Faith Estimate (GFE), the other is a Truth In Lending (TIL) one form will tell you the cost of this mortgage loan, the interest rate and other things mentioned below.
The other document will tell you about the same but you will find that it has additional information. You might also request a preliminary HUD-1 from your escrow, after escrow has been opened.
Prior to signing anything have your mortgage consultant go over the program that you have been approved for. This should include your interest rate, if this is an adjustable or fixed rate mortgage, your monthly mortgage payments and the number of years your mortgage will be for.
Once this is explained to you these same terms and information should be on your loan docs.
From what you have stated he is doing a fairly good job,paying all closing cost, getting you a 95% mortgage therefore you are only putting 5% down on the house you are planning to purchase.
With him paying all closing cost you might inquire if this covers your first year of hazard (fire) insurance and current year taxes?
I hope this has been of some use to you, good luck.
- Anonymous1 decade ago
Chances are all is fine. Right now 5% with no points isn't bad. He's probably making Yield Spread - which is what the lender pays the broker depending on the interest rate. If the interest rate was lower (say 4.75) he might not be making anything from the lender so you would have to pay him his fee at closing. This is normal.
Ask him for a Good Faith Estimate(GFE) - he should have already given you one. Take it to a family member or friend that has gone through a mortgage recently and ask them to look it over. If you don't have anyone who has the knowledge ask him if you can do the closing at a real estate attorney's office. Then the attny can go over the numbers with you before closing.
The Bulldog Broker,
(386) 316-0872Source(s): Licensed Florida Mortgage Broker
- bumgarnerLv 43 years ago
Is your condominium paid in finished without private loan or lien? How approximately proprietor financing? You draw up a private loan settlement with an lawyer and you compromise that he pays you $800 a month until eventually the stability is paid in finished. in the adventure that your nephew fails to make money, you will foreclose on him. you could record this association to the credit bureaus. good success.
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- Brian ALv 71 decade ago
Get a real estate lawyer to represent you in this transaction. It should be relatively cheap to have him look over your documents before you sign them, especially compared to the price of a home.