Mortgages can be tricky and yield a lot of frustrations. For some homebuyers, the process is daunting with lots to understand. We feel your pain, so we’ve identified the top mortgage issues you should know.
“My escrow amount changed”
There’s usually a logical explanation for this, but it’s a good chance the lender underestimated the property taxes or insurance premiums. This is common, especially if the lender based their estimates on the previous owner’s annual expenses. The lender wouldn’t know that the previous owner received some sort of discount and unfortunately, the difference is yours to pay. Remember, anything that’s not in writing is just a guesstimate. Your final escrow will come in writing.
“My terms are now higher”
So first, this is what can’t change:
- Lender fees
What can change:
- Annual percentage rate
- Interest rate
- Discount points
- Third-party fees
- Attorney fees
A lender can make term changes if risks increase. This includes changes in credit score, rises in debt-to-income ratio, loss of income, or if a buyer is purchasing the property for rental purposes. An updated Loan Estimate will reflect these changes and a buyer has three days to review.
“My lock-in rate expired”
Many lenders will promote rate locks for a fee. It’s to allow buyers to lock in a rate in the event that the industry rate changes. Bottom line–Know the terms prior to paying the fee. Ask about how delays in the lending process (from the lender or seller) affect your lock-in rate, if there are any exceptions, and the rate’s expiration date. If the lock-in rate expires, due to a delay of the lender or home seller, it’s important to know who is obligated to cover the fee.
“I lost my mortgage payment”
You sent a payment, but the mortgage lender can’t locate it. First, send an Error Notice to your lender. This gives you and the company time (30 days) to figure out what’s going on. This should also keep this nightmare off your credit for 60 days after receipt of the Error Notice.
It sometimes happens that if a homeowner switched from one lender to another, they might have mistakenly sent their payment to the previous company. The good thing about this is a new lender can’t charge late fees for the first 60 days of a loan’s effective transfer date. What’s more is the previous lender will typically transfer the payment to the new lender the first time.
Questions? Give us a call at 949-356-6400.