Real Home Buying Nightmares

These are true stories of home buying nightmares that our clients have faced, and how you can avoid these nightmares!

Lender Story #1  

Don and his family had been customers with [big bank lender] since the 70's.  He decided to pursue his home loan through them assuming since he had been a customer for so long, that they would take care of him and that perhaps the process would be easier. Don learned the hard way that big banks are not the best at all things.  They dropped the ball big time.    Don came to an agreement and signed a contract with a seller after confirming a closing date with his lender.  They ended up missing the close date because the loan processing was not complete.  Don had to postpone the closing date at the very last minute.

Lucky for Don, the seller was kind enough to extend the closing date. But in today's competitive market, he could've easily missed out on the purchase of his dream home, lost earnest money and could have been out all the time, energy, funds that he put into the purchase.  All because the lender's processes were too slow. Can you imagine your closing date rolls around and being told you're not cleared to close?  You could be stuck in limbo wondering if you're going to lose out on the house?!

From Steve:

"I’ve been banking at [big bank lender] since the early 90’s and our family since the 70’s, I wouldn’t recommend going to them for a mortgage very very slow and not easy to work with. "

Lesson #1: Beware of big bank lending processes  - no matter what incentives they bring to you. Instead, consider a trusted, local mortgage lender who knows every person who will be involved with your loan.   Large banks may not have the ability to provide individual service and closing can be delayed (like Don) or not close at all (which, yes, has happened before!!)

Lender Story #2 

Anthony decided to use [big bank/online lender]  because of the interest rate they were able to offer him for his loan.  It seemed like an easy decision to use [big bank lender] in order to save some money.  BUT, to Anthony's surprise, he wasn't informed that the interest rate increased for him after the approval and they never told him. This messed up Anthony's plans for his monthly house payments. 

[big bank/online lender] changed his rate at the beginning of June and didn't tell Anthony until a few weeks into July and was very close to closing.   

Here's the email and their excuse:

"OK, well we have another problem, I haven't informed the borrower yet, and will call him as soon as I speak with sales, but we are going to have to push the closing out.  The Truth in Lending was never re-disclosed when they changed the rate in June and I can't get around the fact that the APR is out of tolerance.  Although I wasn't involved with the loan in June I will have to clean up the mess.  Unfortunately, I am going to have to overnight re-disclosure documents to the borrower and close after I have confirmed that he has received them.  This is a Federal government requirement and unfortunately, it doesn't happen very often,  but in this case, I am going to have to comply with their requirements.

Thanks,
Steve

Lesson #2:  Beware of bait and switch loans.  Anthony lucked out like Steve and the seller was gracious enough to allow them more time to close on the house.  This was an occasion when sellers were patient enough to wait out the delay.  As a buyer, you have a commitment on a contract to close.  The consequences of not closing can be more costly than the loss of the property.

Lender Story #3 

By this point. we are coming to a theme. Here's our third and final story with home buying nightmares. Elizabeth and Thomas started looking for a house in September. They went through [big bank/online lender] to get their home loan. By mid-October, they found the home of their dreams, put in an offer and got an accepted contract. Fast forward to January 15th, the close date (keep in mind they started the loan process in October), and their lender isn't ready. They don't have paperwork ready and weren't prepared at all.  Elizabeth and Thomas were left in limbo and in a state of confusion.  

We will let this email explain the situation:

"Sean - the title company and I are very confused as to where [big bank/online lender] is in this process.  You stated that you have seen a Closing Statement but the title company states they have not received any instructions with which to prepare a Closing Statement.  So, I don't know how you could have seen it.  In the meantime, the Griffith's are living in temporary housing as they had to turn over their apartment because we expected to close to be last week.  Also, the bank has granted an extension on the contract through the 21st (tomorrow).  Please advise us as to what [big bank/online lender]is doing to assist in fulfilling the buyer's commitment to close on this house, when a complete closing package will be delivered to the title company and what, if anything [big bank/online lender] is waiting on to close this."

They didn't get to close on their house until the 29th (14 days later!) Luckily for Elizabeth and Thomas, they knew someone who was willing to let them temporarily live with them because their apartment lease was up and they couldn't extend their lease further for a month.

Lesson #3:  Beware of how a delay in closing can affect your plans.  Even with the most careful preparations planned out ahead of time, a delayed closing at a minimum costs you time in re-arranging utilities, movers, etc.  And worse case, a delayed closing could actually leave you homeless!  

There is no perfect transaction and whether you think about it or not, there are obstacles that come up.  What's important is that you are working with an team of professionals who can offer solutions to get you to the perfect end result; your new home. When you work with us to purchase a home,  you are working with a team that offers the collective knowledge and experience to get you there.  We take care of you every step of the process and help you balance the pros and cons on every decision, including key components such as your lender.    That can make the difference between an exciting experience and a horror story!