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I was curious if I can get financing for a house, so I contacted a mortgage company to see how much house I could afford (I'd like something between 100-130K, a starter home). I've filled out all the paperwork and sent it in. Was told everything looked good.
They called today to ask for a 'Good Faith' payment. This is BEFORE telling me how much money they can loan me. First off, they never told about this when I was filling out the paperwork. Secondly, is this normal to ask for BEFORE informing me if I even qualify? Seems kind of scam-y to me, but as I'm new to this process, I thought I'd ask.
I thought you didn't have to give a 'good faith' payment until you knew you had a house you wanted. I'm not at that point- I don't want to look if I can't afford
You never give a lender money up front like that. Total scam. If you want to know what you can afford there are a lot of free online calculators you can use. A good rule of thumb is to try and stay around 2.5 - 3 times your yearly salary for the total cost, or no more than 33% of your monthly take-home pay for your payment (mortgage+taxes+insurance).
That is a definite scam. Good faith money is Earnest money you put down toward the home you choose to put a contract on. I do know a few good mortgage lenders if you would like their contact info, direct message me since I am not sure if that is against the rules to post names.
RUN, do not walk, from that lender. Ernest money goes into an escrow account ONCE there is a signed an accepted sales agreement between both seller & buyer. Most "honest" lenders can do what is called a pre-qualification for you right over the phone. That will give you an idea how much of a mortgage you may be approved for based on debt to income ratios. Ideally your total d/i should be under 45%. Your next step will be the pre-approval, which is what most sellers & agents want you to have in place. A pre-approval means that you have submitted an application for a mortgage, credit reports are ordered, verification of employment/income & bank statements are submitted and then reviewed by underwriters to make the decision to approve your loan or not.
I am employed at a credit union and work with mortgages and we do charge an application fee of $475.00 but only after the client has been approved & have submitted a aigned & accepted sales agreement. I suggest to call some of the local credit unions to see if they offer mortgages & to verify if you meet their eligibilty requirements.
I was curious if I can get financing for a house, so I contacted a mortgage company to see how much house I could afford (I'd like something between 100-130K, a starter home). I've filled out all the paperwork and sent it in. Was told everything looked good.
They called today to ask for a 'Good Faith' payment. This is BEFORE telling me how much money they can loan me. First off, they never told about this when I was filling out the paperwork. Secondly, is this normal to ask for BEFORE informing me if I even qualify? Seems kind of scam-y to me, but as I'm new to this process, I thought I'd ask.
I thought you didn't have to give a 'good faith' payment until you knew you had a house you wanted. I'm not at that point- I don't want to look if I can't afford
Thoughts?
agree with other posters.. there sometimes is a payment up front for the appraisal, but that can usually be paid directly to the appraiser, and thats only after you locate a home.
Its called SCAM.. Most banks are $0 cost up front.
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