NYTimes has a good article this morning.
FIXED-RATE mortgages, adjustable-rate mortgages, 30-year terms, 40-year terms, low down payments, no down payments, prepayment penalties! How is a home seeker, particularly the befuddled first-timer, supposed to wade through the current mire of mortgage offerings?
“Most likely, your first pitch will come in your realtor’s office where a mortgage representative may be on staff,” Mr. Gumbinger said. “In hopes of making your purchase and mortgage a one-stop-shopping deal, your agent will direct you to the in-house mortgage representative. There is nothing wrong with discussing your circumstances with that representative, but it should by no means be the only agent you contact about your mortgage.”
This is an interesting concept that has not yet taken hold in the Charlottesville market. For first-time home-buyers this could be a very daunting situation. Choose those who will represent you wisely.
First-time buyers should especially be wary of so-called one-stop shops that offer to take care of everything in the process, from showing you homes to brokering a mortgage to inspecting and appraising the property. “Some companies take advantage of people unfamiliar with the process, steering them to a mortgage at a much higher rate than they could actually qualify for,” Ms. Ludwig said, “or selling a home that any legitimate appraiser would say is worth considerably less than the selling price.”
Most importantly –
Don’t sign anything you don’t understand or anything with a blank space that the broker or lender could fill in later. Don’t be afraid to walk away if you’re feeling pressured, especially if you are told there are no other options.
There are always options, that may be to walk away and wait for the next opportunity, but so be it. I advise all of my clients to not allow themselves to be put into an uncomfortable situation – after all, we are talking about peoples’ homes and lives.