Las Vegas Homes, Condos, Land and Commercial Real Estate Blog

 Getting the best possible deal for a home or condominium is compromised of two parts. One is buying the home or condo at a good price and the other is getting the best mortgage deal.

Any savings on the price of a residence can be reduced by paying higher interest rates for a mortgage loan. For example the monthly payment of principal plus interest for a 200,000 dollar loan at 6% interest rate is about $1,200, at 6.5% is $1,264and at 7% is $1330. As you can see the difference between the payments for 6% and 7% is about $6,000 over a five year period. I will not even go into origination costs etc. We always ask our customers to check with at least three mortgage bankers for the best rate and origination costs.

The other point which I have repeatedly stressed in the web-site is that a real estate buyer can always leverage prepared financials and ability to close escrow quickly and without any complications to get a better discount on their purchase.

The third point is that mortgage companies such as Countrywide Homes Loans require perspective foreclosed home or condo buyers to obtain a pre-approval from them, regardless of the fact that the buyer has already obtained one from another lender. This is done in order for the lender to recoup some more of their loss by selling the new mortgage and they will offer incentives such as free appraisal or discount for origination fees or credit reports.

Now imagine that the perspective neglected to get underwritten-approved and has finally found the right home at the right price and obtains a pre-approval from the lender specified mortgage company. Now time is of essence and by contract “The Buyer shall complete and submit to a mortgage lender an application for a mortgage loan containing the terms set forth in this paragraph within three (3) business days of the Effective Date, and shall use diligent efforts to obtain a mortgage loan commitment within fifteen (15) calendar days from the said date”.

The question is how the buyer knows that he or she is getting the best mortgage deal? How can one compare the mortgage deal offered by the seller to other deals? And most importantly what guarantee does the buyer have to finance the mortgage by closing time. If there are any obstacles to financing the mortgage, the loan will not be financed in time. A loan can fail due to a name change that the bank has to verify with the social security department, this takes up to six weeks. Remember many deals fall out of escrow due to the buyer’s inability to finance.

If after 15 days the buyer fails to procure financing, he/she have to prove it to the lender and the best outcome will be that the buyer will get her/his earnest money deposit back and lose on the residence that they worked hard to find and made an offer on.

Say all went well for the first 15 days and then the mortgage started to fall apart, then what?

“The Buyer is aware that the price and terms of this transaction were negotiated on the basis of the type of financing selected by the Buyer. Any change of the loan type, loan terms, financing, or Buyer’s lender after the Agreement has been entered into shall be subject to Seller’s approval and may require, at Seller’s sole discretion, renegotiation of all or some of the terms of the Agreement.”

Now the outcome is “at Seller’s sole discretion” and it may not be the one desired by the buyer.

I repeat again, if you are going to buy a home or condo in Las Vegas or anywhere else, get under-written approved first and then start looking for a home. This way you not only get the best mortgage deal, it helps you get the best discount for your purchase also.

Remember: The foreclosure problem did not start because of the real estate market fluctuations; it started because people bought homes that they could not afford. If all buyers would have been vigilant about their mortgage deals, there would be no foreclosure problem now.

Related web-site pages: Getting the best deal in Las Vegas real estate transactions , Difference between pre-qualified and pre-approved, Follow our road map to insure you success in your Las Vegas real estate transaction