I just got off the phone with someone who was quoted a payment by a large TV/Internet lender.
I won’t give away the name, but It’s one who is on TV all the time with goofy commercials.
He was told his payment on an FHA Loan was $1150 with everything included.
Now, I am here to tell you that is a boldface lie. The rate with correct taxes, insurance and mortgage insurance on a standard FHA Loan would have to be 1.75%. Not Possible.
So how do these Globo Lenders get away with telling you low payments.
Well, they do not disclose accurate taxes, insurance and mortgage insurance.
So the payment they give you seems amazing. They also give you rates that are usually based on paying a bunch of discount points for. Then once your happy with the fake payment they give you, they take an appraisal fee or application fee and ship you off to another dept to do the real work.
Notice what they never did!! They never checked your actual income, assets, ect… to make sure you can buy the house.
In short they never preapproved you.
Now this is important, you should never pay any fees upfront.
Professional lenders do all the work up front at no cost until you are ready to actually buy the home.
A professional lender will quote you all parts of the payment which are Principal, Interest, Taxes, Insurance and Mortgage Insurance also. That’s how I do it.
I also go a step farther by actually getting accurate taxes and a written insurance quote before I will give out a payment.