Rebecca Richardson - Mortgage Consultant
Make It Make Sense: Breaking Down the Oddities of the Homebuying Process
Buying a home can come with its complications. Is cash really king? Is it worth going the extra mile to get the lowest rate? And what about the furniture seen in the listing photos, does that come with the house?
Things can get complicated, and that’s why I’m here to break it down in simple terms for you.
Be Careful With Your Cash
You might roll up to the offer table feeling like a baller with a stack of cash found between the cushions or slipped to you by a family member. Even though it might seem like the safest way to buy a home, you probably don’t want to deposit it into your account as you prepare to submit your down payment or pay for the closing costs.
But, why is cash so bad when it comes to buying a home?
It all comes back to the paper trail, which is a major part of getting your loan approved.
When you deposit cash, it can be difficult to prove where that money came from. This can raise concerns if the money comes from an allowable source, or even an illegal one.
So, if you’re planning on using cash on hand to buy a home, you might want to think twice to avoid getting into hot water.
Chasing the Lowest Rate Can Cost You
We’ve talked about this before, but there’s more to a good mortgage than the lowest rate. Mortgages are complex and a lot of the small rules can either add up to a loan approval or add up to a lot of wasted money.
For example, did you know that that you can get better terms on a conventional loan with a lower down payment? Or that you might qualify for less with a new job that has big bonuses than you would staying in your current job?
These nuances are why it’s so important to work with an experienced loan originator who you trust. Getting a good mortgage rate means getting a strategy that fits your needs and goals. If you’re only focusing on finding the absolute lowest rate, you’re likely sacrificing solid advice that could save you more in the long run.
What Comes With My House?
Did you know that one of my buyers had the sellers’ cats in their buying contract? If you’re not a cat person, don’t worry, we had them removed from the contract.
Every so often, we’ll receive contracts that have personal property listed, and most of the time, that’s not allowed.
The way it was explained to me, if you turn a house upside down, everything that didn’t fall out comes with the house. Think lights, curtain rods, and mounted TVs. Things outside of that, such as grills, furniture, and pictures, have to be removed as they’re viewed as an inducement to purchase.
An inducement to purchase is defined by the Department of Housing and Urban Development as “expenses paid by the seller and/or another Interested Party on behalf of the Borrower and result in a dollar-for-dollar reduction to the purchase price when computing the Adjusted Value of the Property before applying the appropriate Loan-to- Value (LTV) percentage.”
These items need to be removed from the contract and are handled separately between the buyer and seller.
So, what do you think? Getting a mortgage is a hugely rewarding process, but it comes with its own complications. Like we emphasized, you need to work with an experienced individual who you trust to ensure that you’re getting a mortgage. Ready to get the ball rolling? Let’s talk!