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General store bill format for Mortgage

the last thing you want is for a loan officer to tell you that buying a home is going to cost this much and then they say wow things have changed and it's actually going to cost this much and then a few days later well things have changed again and now it's this much and you're sitting there thinking where in the world did all these increases come from and do we even have the money to be able to pay for this in this trick that loan officers do is so compelling that i've lost clients because of it so here it is loan officers know that most people like you are shopping their loans to find the best rates and the best costs so to win your business so many loan officers will only quote certain costs that they're required to tell you when they show you how much it will be uh or how much it will cost to buy a home and i'll cover more on what these two tricks are but a perfect example of this is i was talking to one of you someone who was watching one of my youtube videos um and they reached out to another loan officer on youtube and i'm not gonna name any names here but yes he said hey uh they gave me a quote but all they did was send me an email with a rate in it and nothing else and is this normal like it was just hey this here's your rate let me know when you find home and we look forward to helping you and i was talking with them like how can you make an informed decision about a loan with such little detail and the simple answer is you can't if you just have a rate if you don't have all of the other information about a loan then you can't find what's going to be the best option for you and likely there's kind of a trick that might be happening in here where a loan officer is trying to get your business this way and not being able to make the choice on which loan is the cheapest option for you can cost you thousands if not tens of thousands of dollars over the period of the time that you're in the home and you have that loan so here are the two main tricks to watch out for when you are talking with a loan officer so number one is hiding your true closing costs so when you get pre-approved by a loan officer they likely will give you a quote showing you how much it will cost to buy a home things like your down payment your closing costs everything that would include like appraisal fees taxes title costs homeowner's insurance however your loan officer and lender don't charge all of those costs a lot of people think that the lender is one charging all these fees and they're really not they're giving you estimates of those fees and lenders can only control what are called section a fees section a fees are also known as origination charges or origination fees um and they're the only fees that can be charged by a lender so these are things like an underwriting fee administration fee it's section a page two in the top left of a loan estimate and they're not allowed to increase after quoted on a loan estimate so if a lender gives you a loan estimate that details what their section 8 costs are let's say it's a thousand dollars they can't come to the closing table and then say it's well it's actually two thousand dollars now they have to honor that quote or let it be lower but the issue here is that a loan quote isn't binding whereas a loan estimate is a loan estimate is an actual legal document regulated by the cfpb where a loan quote isn't so what's frustrating is most of the time you can't get a loan estimate until you're actually under contract for a home so you have to hope that the quote that you get from a loan officer when you're pre-approved is actually accurate so what ends up happening is you ask the lender how much is it going to cost in closing costs and the lender not telling the full story to you only quotes you what they charge they only quote you the section a fee and not all of the other closing costs that are happening in a deal section a fee are only a portion only a sliver of what the closing costs are the rest of the closing costs not charged by the lender again are things like the appraisal title charges recording fees taxes homeowners insurance even though the lender doesn't charge these things they need to be able to estimate those to you so you can get a full picture of what's going on when you're actually buying a home now it might seem innocent maybe to some but it's entirely unfair for loan officers to expect most people understand how all closing costs work together especially in comparison to what a lender charges and what all the other estimated third-party charges are in closing costs and they hide behind this idea uh that they're going to show you their numbers and not helping you understand the total costs of buying um a home almost putting the burden on you so it's like they sit back and like well you should have known all these other costs it's just entirely unfair um and and there's a lender in my area that does this all the time so all their advertising advertisements say our closing costs are only 4.99 and everyone around here goes crazy because they're like it's only 4.99 over here with this lender um and so what's frustrating is when i would give a close quote to clients i would show them the whole picture right you have these are what your estimated taxes are going to be this is where your insurance is going to be recording fees appraisal title fees uh none of which are charged by us as the lender and those fees will add up to several thousand dollars right just in taxes you're probably going to be paying a few thousand dollars um put into an escrow account you're gonna pay a year of homeowners insurance upfront title costs are gonna run you probably at least a thousand dollars uh and so what ends up happening is people would compare that uh like this several thousand dollars of third-party costs not charged by us the lender but then compare it to 4.99 because one other lender that's what they charge in their section 8 costs but they're not telling you the full story and it's so frustrating when i'm helping a client understand their total cost and they say well this lender over here they're only charging 4.99 and you're charging thousands so we're gonna go with them only to realize far too late in the process that the lender hid most of the other closing costs and then blamed the client for not knowing how closing costs work it's so backwards and far too many lenders only show you their fees because they want you to think their costs are super low compared to the full quote from other lenders so if your loan officer isn't showing you all the estimated fees even the ones they don't charge they likely don't have your best interest in mind it's dumb and dishonest and i'll show you how to protect yourself from it but before that one other trick that loan officers can do is by artificially lowering your monthly payment on pre-approval quotes so kind of hiding quotes in two different ways the down payment closing costs like we just talked about and also artificially lowering your monthly payment uh there's a prominent lender out there that works with a lot of veterans i'm not going to say their name but for some reason their software i believe it got updated but it wouldn't show fully accurate monthly payments to people when they were giving quotes see a monthly payment quote should include your principal your interest your mortgage insurance your homeowner's insurance your property taxes and homeowners association fees as well that should all be included in your monthly payment because it's all something that you're going to have to pay right so why not show the full thing even if it's a quote right things like taxes a lender has to estimate um they can't just leave it out because they don't know and i don't know if they just had bad software or what but it would never include the escrow payments those things like taxes and homeowners insurance um so they were always left out like can you imagine like a lender quoting you a thousand dollars is a monthly payment they say hey it's only gonna cost you a thousand dollars a month uh to have a mortgage for this home but then you get your first mortgage payment it's actually seventeen hundred dollars per month because of the extra escrow that wasn't included in that thousand dollars you start to feel a little cheated and more sneakily than leaving off escrows uh or loan officers who kind of drastically under quote a client um this happens often with online lenders who aren't familiar with a location or they can't be bothered to do the 60 seconds of research it takes to figure out like the local cost of where a client is at so for instance like taxes on a home around here in dayton ohio uh are about 4 500 per year on a 330 000 home it's not difficult to look up find the area someone's looking in and look at what average taxes are around that area but so many times i've seen quotes from other lenders where the loan officer said taxes are only two thousand dollars a year um and the client will go with that lender because they think that their costs are lower like no it's just the loan officer not giving you a quote that says accurate and considerate as possible because a lender cannot control taxes it doesn't matter what they quote you the county will determine your taxes so just because a quote is low doesn't mean that it will actually be that cheap when the time comes to write the check okay so how do you avoid getting tricked knowing the tricks is half of the battle the other half is understanding exactly what you need um to do as a borrower to make the right decision so far far too many clients choose the wrong lender and then realize the cost got switched on them when they went under contract and a lot of people feel like it's too late just just know that it's not too late at that point to switch if you need to but how do we avoid even getting to that point in the first place so really one of the best ways to avoid getting tricked um is when you're comparing lenders so first of all you do need to be looking at different lenders you can't just look at one and then say that works for me and move forward with it ideally you want to be looking at at least three lenders and only decide on the lender using the section a costs right we want to see the other estimated fees i want to see what an estimate of taxes and insurance and everything looks like so i can see the full picture but i don't want to choose different lenders i don't want to go with lender a just because they had lower taxes than lender b because the taxes are going to be the exact same no matter the home i choose the only thing that's going to be different between these lenders are the section a costs and the rates and mortgage insurance that they have as well so i only want to be looking at those and you can ask a lender what are your section a costs what are your origination costs those are the only things i need to know when choosing the lender it doesn't matter with a quote for insurance because insurance is something that you're going to shop for on your own also compare the monthly payment um with your own independent research so they're likely going to give you a monthly payment they're going to estimate taxes and insurance um i have a tool for you you can text my number 937-358-6542 text payment to it and it will send you this free calculator where you can go and actually compare homes side by side look at the monthly payment as well and it will give you some averages of taxes you can put in there you can also go look up things on something like zillow and put in taxes in there too to get an estimate of your monthly payment and compare that and then finally ask your loan officer for full breakdown including you definitely want to have uh your rate in there you also want to have all estimated costs okay everything from uh insurance to taxes recording fees title appraisal all that needs to be included in there even if it's estimated even if it's not charged exactly by the lender and i also want a full monthly breakdown okay so in the full monthly breakdown i should be seeing principal interest mortgage insurance property taxes homeowners uh homeowners insurance and homeowners association fees if you're looking in an area that has homeowners association fees you should be seeing all of that from your lender and not just an email with a rate or not just a quote over the phone i want to see a full breakdown of all of those things now not every loan officer is bad enough to trick you but you do need to be aware of how you can protect yourself as much as possible and choose the best lender for you which is exactly why i made this video on choosing the best lender who will guide you through the process and help you save the most money choosing the cheapest loan option