topic Re: Broker says don't befriend a realtor? in Mortgage Loans

Broker says don't befriend a realtor?

msensa — Thu, 10 Apr 2008 19:55:00 GMT

Hello, all. Still working on those mortgage app's with broker. I got a lawyer to write a pfd letter to Forcht Bank, hoping it will make them agree to what they refused already. I don't think it will work, but it was only $50...

Now she's found one little company that's still doing FHA's with zero score. Hubby has no score, my mid is a 588. I've sent all the paperwork she's requested to build 4 alternate tradelines for him, so we can try this with just his credit, and get a backup loan while we see what will happen with my letter to Forcht.

Here's some questions...

1. Why does she tell me not to let a realtor help in my home search? It would be a lot easier to pick one and let them take us everywhere!

2. What impact are late electric/gas bills going to have? They're paid monthly, but when they can swing from $150 to $350 in a month, we've had several lates. She says they just want to see consistent payments, but I'm freaking out.

3. I have to show bank statements for rent checks clearing...because my husband's name wasn't on the account until this March? Why and how is this any different than them seeing the checks themselves that also DIDN'T have his name on them? Sometimes I did a bad job keeping up with my math, and had some overdrafts here and there. I don't want them to see those! My landlord filled out a VOR, and she's kept a receipt book. Can these work?

We've never been at a point to have $5000 saved up before (soon to be $6200-thanks, stimulus payment!) and are getting very anxious to be told to GO MAKE AN OFFER. She said we can, but I just feel like I'm putting the cart before the horse.

Any advice?

Re: Broker says don't befriend a realtor?

Anonymous — Thu, 10 Apr 2008 20:10:36 GMT

Our realtor was the best part of the whole home buying experience. She's great and took us on her Saturday (we live out of town) to 15 houses all in one day! There is NO way we could have seen or arranged to have seen all those homes on our own.

We had to show bank statements to get our VA loan as well.

Message Edited by caliborne on 04-10-2008 01:10 PM

Re: Broker says don't befriend a realtor?

msensa — Fri, 11 Apr 2008 11:53:36 GMT

Yeah, hooking up with one realtor would be so much easier! I'm contacting my broker today because we want to make an offer on the house we viewed last night. Hopefully we'll get some answers.

Re: Broker says don't befriend a realtor?

ShanetheMortgageMan — Mon, 14 Apr 2008 06:59:26 GMT

1. I have no clue why your loan officer is telling you not to use a real estate agent. If you haven't purchased a home before and aren't sure about the homebuying process, I strongly recommend you use a real estate agent. You should ask your loan officer why they don't recommend one.

2. Are you using the electric/gas bills as part of the 4 alternative trade lines for your husband? FHA will want to see no late payments on them, but perhaps the companies won't actually report you as late.

3. If you pay rent to a private party such as a landlord (vs. a property management company) they will want to see the cancelled checks along with the landlord filling out a verification of rent history form. Not sure why bank statements would be needed if cancelled checks can be provided, especially when the bank statements wouldn't have any additional information to support your husband being a part of them or not. The only way I can see them helping is if your husbands income is auto-deposited into the bank account with a line item description reading so - then an underwriter could use inductive reasoning to determine that if your husbands income is going in, and the rent is being paid from the same account, then your husband would be partially responsible for paying the rent.

If you want to be absolutely sure about your financing options before you make the offer then I'd press your loan officer to go through the whole pre-approval process - which means you'd need to provide any and all documents your loan officer would be asking, they'd be reviewed by an underwriter, and you'd get a decision on the loan approval back.

Re: Broker says don't befriend a realtor?

msensa — Mon, 14 Apr 2008 12:13:03 GMT

First, thanks to all who responded to my post. Some things have gotten cleared up for me. Shane, it's really the coolest thing that you take so much of your time to help us greenies out!

1. My broker clarified the realtor dilemma. She simply wanted me to "avoid" getting another realtor involved. Try using the one listing the house, and so on. Do as much of my own legwork as possible to save money. She said that if only one realtor is "in" on the deal, then they will sometimes use a portion of their commission to help seal the deal, since they aren't sharing with another agent. I actually got a realtor to agree this was smarter if it could be done!

2. She's said we're pre-approved. Worst case scenario loan is giving up almost all my savings. Best case is spending less than a grand. She's submitted the paperwork, and feels we're strong.

3. Not sure what will happen on the rent thing. I can get copies of the checks. There were about 4 times though that I paid her with cash. I KNOW YOU NEVER PAY RENT WITH CASH. But I did it anyway...this little lady has known me all my life, and was my grandmother's friend. I'm her only tenant with check writing priveleges, and she sometimes likes to see the cold hard cash. Like I said though, she keeps a receipt book.

Shane, tell me that's alright! And yes, hubby's checks are auto-deposited into that account, so I could prove it if they need to see. We don't want to tell them he didn't have his name on the account because he had an unpaid student loan that we paid off in February--it hasn't appeared anywhere on his credit.

We went ahead and made an offer last night on a house...we're going to check over the counter offer with the broker today and most likely accept. If you'd like, I could put the terms of the offer up for you to critique.

Re: Broker says don't befriend a realtor?

ShanetheMortgageMan — Mon, 14 Apr 2008 15:44:20 GMT

When you purchase a home that is listed on the MLS there are commissions paid out to both the listing agent (sellers agent) and selling agent (buyers agent). Usually 3% per side. By not using a buyers agent, the idea is that you could either reduce the sales price by the 3% your agent would have got, or be able to use that 3% commission which your agent would be getting to go towards your closing costs. However in trade you give up having exclusive representation in the transaction - you are now represented by the sellers agent which originally was only representing the sellers interests. If the goal of a buyers agent is to get the best deal on the home and to make sure that the buyers interests are looked after, and the goal of the sellers agent is to make sure the seller gets the highest sales price and make sure the sellers interests are looked after. I'm not saying there is not such thing as a bi-partisan agent, but they are hard to find, most will appear they aren't siding with one party but don't end up that way (which is illegal to do, but hard to prove).

It's OK to pay with cash, not everyone has to pay with checks, but if you are looking for it to qualify as an alternative trade line then it's not as strong as if you did pay with checks the entire time. If the gap in paying rent by checks was "cushioned" by paying rent with checks on either end (so for example it went: check, check, check, check, cash, cash, cash, cash, check, check, check) and the landlord confirms all rent was paid on time, then with a letter of explanation (seperate letters from the landlord & you) it's still likely it would work out to be used as an alternative trade line.

You could lay out the terms of the contract here to get feedback.