The other day we got a call from a potential client who was referred to us from one of our past clients. He was a first time home buyer, looking to buy a home in the Silicon Valley.
New Client Goes into His Bank to Get Mortgage Financing
We asked him if he’d spoken to anyone about financing and he said, yes he talked to his bank. He explained he went into his bank, which is one of the bigger banks in the area, and asked about applying for a home loan. They gave him a card and told him to call the 1-800 number and someone would help him. (Red flag #1)
New Buyer “Pre-Approved” by Big Bank…Not Really
When the buyer called and talked to the representative, they asked him a few quick questions about how much he made, ran his credit and told him what he could afford. They emailed him what they called a pre-approval, which was a cute little certificate with a seal that they called a Buyer Certificate and told him to call when he found a house. Easy, right? …. Wrong!
What’s Wrong with this Story?
What the buyer didn’t know was that he was not, in fact approved for a mortgage. They ran his credit, yes, but they had not verified his income or assets. He had not sent in any pay stubs, bank statements or tax returns. The cute little certificate he got was essentially worthless.
Plus, the buyer had no idea what type of loan he was approved for, how much his monthly mortgage payment would be or how much he was going to put down.
What Happens When the Buyer Calls Back?
After speaking with us, he decided to call back and ask the bank some questions about what he received. What did the bank say? “We’ll answer all of your questions when you are in contract.” Seriously?!?!?!?!?! The buyer was supposed to wait until he entered into a legally binding contract with a seller to have his questions answered? Find the house he wants, have an offer accepted, spend $1,000 or more on an appraisal and inspections (which he will lose if he doesn’t get financing) and then find out if he is approved and what his payment will be? Absolutely not.
What Happened to this Buyer?
Needless to say, we recommended he contact our Co-Author, Chris Williamson, who answered all of his questions BEFORE we even started looking for a house. He presented several loan programs and helped him decide which was best for him. He knew exactly what his monthly mortgage payment would be for the loan amount he was considering and the fees that would be involved in acquiring the loan. The buyer dumped said Big Bank and went on to have a very successful transaction.
Moral to this Story?
Find a San Mateo Mortgage Advisor who will take the time to explain the loan programs, fees, loan process and answer all of your questions. Buying a home can be a stressful experience if you are not prepared for what to expect. Find someone who wants to earn your business and will help you have a stress free move!
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Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.
Raymond Stoklosa, Broker/Co-Owner
Chela Stoklosa, Realtor/Co-Owner
