Home buying A to Z ( How to get a mortgage) How to BUY A Home Part 3/4

Home buying A to Z ( How to get a mortgage) How to BUY A Home Part 3/4

step number 2 – You're ready to go out there
with a realtor and find the house that you're looking for. Now you know it's human nature
if you're approved for $300,000 most people really want the house that is $350,000. It's
just how things work. But its reall important that you stay within
your approvability. Where you're approved. What is the sense in wasting everybody's time
to go see a $500,000 house if you're approved for $400,000 so you have to keep your expectations
realistic and the location. So your location in one location
a four hundred thousand dollar house may be incredible and another location a 400,000
house may be a thousand square feet. So which one do you want? How far is your commute? You
need to look at all these things as far as what's reasonable to you what do you really
want in a house and that's where a good agent is important to a couple of things that are
really important about the agent that you pick and we're always there to help you pick
an agent that's going to work for you.

Number one, you want somebody with experience number
two you want somebody who's a good negotiator because they're going to be negotiating. Half
their job is finding the house the other half is negotiating on your behalf to get you the
best price now one of the things I personally do is see I don't give a borrower or even
a Realtor the DU approval or the pre-approval letter until I know how much the offer is
for because why would I give a letter why would i give a letter saying you're approved
for 450,000 if you're going to offer 425,000 on the house? See I want to give as exact as
possible because otherwise, that other Realtor could be saying yeah he's approved for 450
but uh the letter you know he's only offering 425 maybe we could squeeze him for a little
bit more I don't want that to happen. Myself and the Realtor you choose we're going to
team up and we're going to see what we can do to help you get your offer accepted.

what I do I do to help you get an offer accepted. instead of just sitting back and waiting for
the Realtor to make an offer and right now we are in a crazy time in Southern California
where I am, if a house is in the 450,000 range they're gonna get not one not five, not ten
but they can get thirty to fifty offers on that one house. So your offer needs to stand
out somehow and usually it's offering above the asking price hey they're going to look
at who has the best credit, who has the most likability as far as going to be approved.
You know what deal do they like the most because you know an agent wants to know, am I going
to get paid? Is my client going to go crazy trying to get this done or is this going to
be an easy one for them? So I personally make a phone call to the agents and I tell them
to look this is super important this is Chris Trapani the Mortgage Pro and I have a slam
dunk deal ready to go here! I have a client they have a 702 fico score they have this
much money and they have this much in reserves and that debt ratio works within the guidelines
and I'm going to try and sell them on what a great borrower you are.

And that's what a
really good loan officer is supposed to do. So we work it as a team the realtor myself
and yourself if we're working together and we try and get your offer accepted and once
we do that and let's see the appraisal and how much is the recording fee we take it to
the next step Okay, let's assume that we worked hard we worked as a team we made an offer
we spoke to the listing, agent we got your offer accepted what's the next step? The next
step is we open escrow. And why is opening escrow important? What is that, what is an escrow?
Escrow companies, what they do are their job is to act as the fiduciary, they make sure
everything is legal that the loan and the buyers all the information is recorded with
the county.

They make sure all the money that comes in your deposit and all the money coming
from everywhere, the loan money, it all comes together. They hold it and when the time is
right and the loan is recorded with the county, they're going to divvy up the money. Now in
a number of states we do not use escrow companies. In many states the use attorneys but basically
it's the same process, only the attorneys probably charge a little bit more money but it's the
same process. This is what we do and how it works. So now we've opened up escrow we're
asking them for all the fees. What are we asking them for fees for? Well there's escrow fees
and title fees. And we have to put all the fees together with
the lender fees, such as processing and underwriting and let's see, the appraisal and how much is
the recording fee going to be? And there's all these different fees.

A to Z

Realize that there
are probably over 25 people that are going to work on your real estate loan that's pretty
crazy. But there's 25 people, those people obviously have to get paid. So there's a whole
bunch of different fees different states have different amounts. Depends on where you are
but we also very often have what's called an impound account. We're going to open up
an impound account which is your personal savings account. And the job of that savings
account is every month when you put a payment in, a portion of that money is going to go
into that savings account, your savings account for property taxes.

And a portion will go in
for homeowners insurance, so that when the property taxes come due and the homeowners
insurance come due, they could write a check or electronically pay it. That's obviously
I'm showing my age here writing a check, but they'll pay that money for you out of your
account. Now it costs money to set that account up. See it depends on what month of the year
the taxes are due in your state and what month you're in. As an example here in California
in the month of September, you'd have to put 9 months property taxes upfront because the
next month six months property taxes are due and they have to have enough money so when
the property taxes come due again every six months that they have enough money and when
the homeowners insurance comes due a little piece of your payment every month goes in
so that in 12 months they're ready to make another payment on your behalf. If you ever
sell the house, refinance the house that money in the impound account comes back to you because
it's your money.

So we open up escrow, we ask the escrow company for all those fees so that
we can put them together in orderly and legal fashion so we can give you what are called
loan disclosures. Now the loan disclosures include a loan estimate. The truth is the loan
estimate is not exact it can't be. But what they do is they overdo and they raise some
of the fees, on purpose it's not that you're going to pay them, but they have to disclose
and they can't, if the fees are too low they can't raise them later because that would
be illegal in most of those fees.

So they put them high and if anything happens they're
covered, but most of those fees or many of the fees will be lower. Now you're going to
sign that loan estimate and that allows us to go to the next level. You're going to sign
the loan estimate with a bunch of forms one of them is an intent to proceed. So that allows
us to go to the next level and the next step is going to be ordering an appraisal.

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