Yep, the wonderful “document every dime” game the lenders like to play. They did the same thing to me over a $500 gift from my grandparents. I was collecting the money for my down payment in an account at a local credit union, so I could easily get a check when closing time came. I was diligently documenting every security I sold, and exactly where the money came from that went into that account. I deposited my grandparent’s check into a different account (which contained much more money than was on the check) and then moved some of the money from that account into the down payment account. Because my grandparent’s money had touched the account, I needed all kinds of signed gift forms, or get rid of the money.
In the end it was easier, and cheaper to launder my own money. I moved the suspect money out of my down payment account, and then paid $20 to wire money from my non-tainted brokerage account into the down payment account. Is that confusing? Is money fungible or not? I had (let’s say) $35,000 in liquid net worth and needed $20,000 for the down payment, how can $500 taint an account with $5000 in it, when I’m only pulling out $2,000?
Anyways, yes buying a house is incredibly stressful. The thing to keep reminding yourself is that nobody in the process (except the inspector, grr) gets paid unless the deal goes through. So no matter how screwed up things are, it will probably work out in the end. Of course that was my philosophy 9 years ago when I bought. Maybe in todays screwed up mortgage market the lenders are better off not making any loans.
The inspector for the place I bought was pretty worthless. He went through the house and turned on all of the lights and the faucets, but didn’t happen to notice that the diverter valve in the tub was broken. Water only came out the shower, not the faucet.
However, the inspector my brother got for his house did a fantastic job, and was worth all of his $300 or whatever it cost. The first house he went under contract on was severely broken. The best was a brick hanging from a drain pipe, in order to keep the drain from rising up out of the bath tub http://i367.photobucket.com/albums/oo118/echoreply/100_1989.jpg. Another winner was the mumble mumble valve on the kitchen sink, which came from an RV. All of the problems were obvious once pointed out, but they had mostly been covered enough to get that far in the process before running away.
10 years ago, an inspector saved my butt big time.
He called me in the middle of the inspection and asked me to come down. He then explained the foundation was heading into bad shape and the damage was between $90K and $130K.
They got it because by the time it was apparent things were going so horribly, our closing date was almost there. We were told my our agents, the loan officer, and a family member who’s in the real estate business that things were taking a while to process and that it wasn’t unusual for the lender to take a while to process the loan. What wasn’t acceptable was that they were making new requirements so close to what should have been the original closing date. After they took four weeks to even look at the application, we were terrified of switching to another lender who may take just as long.
I think the key work in my rant is “again,” which I accidentally omitted from the last sentence. A client would be making a huge mistake to switch consultants a week before a major report was due, but he’d also be making a mistake to come back to a consultant who failed in the past.
Just so you know for next time, you don’t necessarily have to “switch” anything. You can have the process moved along all the way to the approval process before you have to commit anything. At least, that is my experience. I had 20 days to find lending for a closing, and I just applied at a bunch of different banks. By the time I settled on one, all the tough work was done & I just had to sign a few things & show up at the closing.
First-time home buying seems especially trying. And if you don’t have enough down payment.
The mortgage companies are also famous for waiting until the absolute last minute to do important things, some of which of course don’t happen quickly enough for the closing date. And they had months to prepare. :mad:
A slight hijack to clarify what is included in closing costs? This seems to be a common rant topic in US home buying threads, but it is rarely specified in detail, presumably because it is common knowledge for US Dopers.
In my own one and only home buying experience, the only amounts payable over and above the actual agreed purchase price was ~$2,600 payable to our lawyer for his fees and the costs of title and tax clearance certificates, property title transfer, transferring utilities, etc., most of which were municipal/provincial government requirements not subject to any negotiations. I get the impression that for many US buyers, these costs are essentially the equivalent of the extended warranty/undercoat type stuff that the car salesman tries to add on to your car purchase, but less negotiable.
OP, if I’m reading you correctly, you’re talking about new construction. With regard to the pipes etc…
Jordan Fogal and her husband Bob are waiting while the builder, Tremont Homes ignores the construction defects that have caused rot and mold to consume their $400,000, 2 ½ year old home. Now the builder and the American Arbitration Association (AAA) are trying to destroy them for complaining.
Upshot of the problem: shoddy construction. During the boom, contractors were putting up houses as fast as they could, and quality be damned. IIRC one of the articles I saw about her house said that her husband was upstairs, taking a bath. He came down and they were sitting around talking when BOOM! The dining room ceiling fell. Reason: nobody had connected the tub drains to anything and all that water just pooled above the dining room ceiling.
Homebuyers are stuck with mortgage payments AND repair payments. Worse still:
*Question: Why don’t you just sue your builder?
Jordan Fogal: “That is the question I am asked most often. The short answer is; we can’t. When we bought our a new home we gave up our seventh amendment rights and no longer have assess to the courts. Most people in this state are totally unaware when they buy a new home that they cannot sue their builder and their only recourse is to be subjected to a binding arbitration process. Worse yet, most people can’t afford it and the builder knows it.”*
My sister has been fighting something along these lines for about three years now. Her house is habitable, sort of…but for instance they’ll have to rip out all the plumbing because it wasn’t done properly and she has sewer gases coming out of her drains.
I bought my first home in 1998. It was the hell you describe. I ran my ass off documenting this and that.
I bought another (different) home in 2006. I was anticipating the worst. We heard nothing, and it was a week before closing. I was waiting for the bullshit that never came. Show up to closing, sign documents, own home. Painless…
Interesting, just like **jtgain, **my first home buying process was a horror. Dragged on for months, document this, document that, seller wants more, we say no, etc.
When we bought our second home, we sold our home, bought this home, and moved in, all in 25 days. The lending process was smooth, there were no nasty surprises, and there was good communication from all parties. I was amazed!
I’m dreading ever having to sell and move again. It must mean that my next home purchase will be a nightmare.
I wonder if Hooker’s experience is related to the problems the mortgage market has been having in the last year or two. When I bought a house a few years ago, nobody asked for bank statements, or verification of employment, or anything like that. As I recall, the only financial document I showed them was my pay stub.
I think that banks got pretty lax about that stuff, and now the pendulum has swung the other way, so to speak.
Some documentation (proof of employment and/or paystubs) is what banks should have been asking for in order to prevent the credit crisis. The bank should verify that you can pay for the home. I think the rest of the requirements (documentation of the deposits that didn’t look like a paycheck) are fallout from the crisis. Even this additional documentation would have been a mere annoyance if the requirement had been presented upfront and didn’t rear its head until we were almost to the closing date.
Closing costs are the fees the lender and escrow company charge when making a loan. The fees are due at the end of the buying process (i.e. when the title changes, not when the loan is payed off 30 years later) and are generally not rolled into the loan, though many lenders give options to increase the intrest rate for lower upfront fees.
