You did it you finally succeeded. Your offer was finally accepted after losing out on 3 other multiple offers on 3 other houses. You finally found the one, after 6 months of looking. Your gonna be a home owner soon. No more worrying about the landlord raising the rent or calling them to fix the leak in the bathroom, that will soon be your problem and you can't wait.
Inspection went a little rocky but luckily the sellers were willing to fix most everything and the rest dad and your uncles can help fix. Thankfully no foundation issues which was a big relief considering how old the house is.
Appraisal came in good even though dad swore up and down that it was over-priced and it would never appraise. It even appraised for more which your agent says is great because you already have equity and your just starting out. You have closing set for next Friday so you can have time to move over the weekend. Mom, dad and Uncle Pete promised to have the trailers cleaned out by then so they can help you move. You've bribed all your friends with pizza and beer if they help you and they have all agreed. Everything is set.
As your in line at Target you get a call from your lender you ignore it and figure you'll just call him back when you get to the car, after all you don't want everyone to know your business. Then you get a text from him, " Call me back asap, something came up". Your hoping it's nothing major but hurry and get everything paid for and in the car just in case.
Despite the lump in your throat and your heart beating like you just ran a mile you get up the courage to call him back, every ring feels like an eternity. Finally when he answers he says they just got your file back from the underwriter and he rejected it. Apparently there is an issue with your debt to income and your credit somehow dropped when they rechecked it yesterday. Unfortunately they aren't going to be able to give you the loan until your credit card gets paid off. So no house for now.
At that moment your heart sinks. You can't remember if you hung up the phone or not all you keep thinking is how could this happen? How am I going to break this news to my spouse? To the kids that already have their rooms and paint colors picked out? At that moment your realize your still on the phone. Your lender says hes gonna send your agent a letter and call her so you can try to get your earnest money back and they're gonna credit you back the appraisal fee which should make you feel better but it doesn't make it sting any less. Thankfully after your agent explained the situation to the other agent, the sellers agree to give you back your earnest money.
Although this is probably the one of the grimmest most depressing stories you've ever read; its a scenario that is all to real for many potential buyers. We always preach about choosing a good agent to guide you through the process and yes that is a very integral part that can make your life much easier, but I believe that it is equally as important if not more so to choose a good lender. Now you're probably thinking aren't they all the same? Don't they all do the same thing? Yes, they all have the same requirements as far as being licensed and yes, for the most part they have similar lending guidelines they have to follow but they are not all created equally.
A lender is very similar to a doctor or a surgeon.I mean you wouldn't trust just anyone to cut you open, you want someone that knows what they're doing. I'm sure you probably have a favorite doctor, massage therapist, or hair dresser and I'm sure they're your favorite for a reason. Most often, its usually because they've been doing it for a while, they do a thorough job, and you feel like you can put your complete trust in them and they won't let you down. Picking a lender is just as important.
Buying a house is probably the biggest purchase and financial decision you will make in your life you don't want to trust just anyone to help you. I promise I'm not trying to scare you away from buying a home, because owning a home is very fulfilling and something I think everyone should experience. I say this because I want to keep you from being another lending horror story. I'm sure we all remember the predatory lending issues from 2007 right?
As agents, we work and come in contact with many lenders some better than others. Just like you wouldn't go see a specialist without getting a referral from your primary care doctor it's always better talk to a lender after you've met with your agent and discussed your particular situation. We don't get any compensation for passing along information on various lenders but what we do get is the assurance that you will be taken care of. We get the comfort of knowing that if you call your lender with questions they'll do their best to get you some answers. We get the satisfaction that when they write you that magical prequalification letter that they have done their homework and gotten the documentation they need. Now this is not to say that something couldn't still come up that they weren't expecting because of course no one is perfect, but with a good lender issues very seldom arise. This is why it is very important: and I can't stress this enough' that once your lender gives you a prequalification letter that you don't to anything that could potentially affect your credit. That means no new credit cards, even applying for one will ding your credit, no big purchases,and especially no late payments, nothing without talking to your lender first.
After all their ultimate goal is to help you get into the house of your dreams, they don't like being the bearers of bad news. So remember before buying a house you must first choose both a good agent and a good lender that together will work hard for you.