https://www.youtube.com/watch?v=3jPMjATbepE
Guys, we have so much to talk about. I just have tons of sheets on my desk. You guys have been giving me such great ideas recently. I've had so many fun conversations with a bunch of you. I've been doing some of the calendar calls; those are always fun. So, um, if you guys have questions, get on the calendar. It's generally Alyssa, although I've started doing it more because I missed it. I miss talking to you guys.
Anyway, okay, mortgage lender red flags. This is important because this is what I noticed on the calls, and like, whenever I get a rescue call, it's always Saturday or Sunday, always. And it sounds the same every time, and every single time, the crisis could have been averted had the buyer noticed this red flag.
Okay, now look, there are some other situations too, but this is a recurring theme. So here is the biggest red flag with a lender: they give you a pre-approval letter but they do not give you a closing cost estimate breakdown. Let me say that again: they give you a pre-approval letter but they do not give you a closing cost estimate breakdown. And let me add to that, they should go through it with you.
Okay, so what happens most of the time is, look, lenders know that you've got real estate agents pushing you to get pre-approved. So, and in your head, you're like, well, if I get pre-approved, everything's great, everything's fine, you know. My real estate agent said this lender is great, everything's great, everything... No, no, no. So the lender will just give you a pre-approval letter. You're like, yay, shopping, yay!
Okay, guys, how much is that lender going to cost you? How much are your closing costs? How much should you be budgeting for homeowners insurance? How much should you expect for taxes? What's your estimated monthly payment? What interest rate did they qualify you at? What was your debt to income at? What point, if rates go up, do you not qualify? There's so much information that, for you to be successful as a home buyer, an educated, empowered, successful home buyer, that lender needs to give you.
And what I see, I see it non-stop in the industry, and it's because you guys are setting the bar too low for lenders. Yeah, well, look, the lenders should be better, but at the same point, they're getting away with it. Okay, they're getting away with giving buyers a pre-approval letter and saying, go shopping, yay. What the... what? Like, guys, if I went to a car dealership and the guy said, here's your car, Jen, go, I would be like, okay, well, wait a second, wait a second, before I go home in that car, like, I need to know, how much is my monthly payment going to be? How much do I need to put down? Are you charging me a fee? Like, what are my fees to buy this car? It's the same thing with a house, except times a thousand. You need to know what your closing costs are going to be.
Okay, it is the number one way to identify if you're about to get ripped off by that lender. I know that was graphic, I'm sorry, ripped off, is that better? If you're going to get ripped off by that lender. So, let's talk about when you should be seeing those closing costs, at the latest.
Now, some lenders, you know, the minute you fill out an app, they just shoot it out to you. I personally don't like that. So usually, what I do is, I'll tell you what I do, okay, and then I'll tell you why I do it, and that may help you guys figure out, you know, why you want that.
Okay, so when I get an application from a buyer, it immediately goes to Jen or Sam in my team, who gets it structured for a full underwrite. It then goes to our processors, Marie and Chadwick. Now, of course, Jenner and Sam are reaching out to the buyers, saying, hey, like, we just want to make sure, like, all this information is correct, because that's important. They're also looking at assets. They're also, if the buyer has any questions at that moment, answering them.
Okay, but our key thing is we want to get it to underwriting as quickly as possible, so that we can see the whole picture, so that I can see the whole picture. Because as soon as the file's through underwriting, now, this is all before you're even shopping, you're not even shopping yet, we're doing all of this hard work before you're shopping. You're not paying us to do this. We're doing all this work upfront because we want you to be successful. Okay, we want you to win.
So, we're going to fully underwrite you. As soon as we're fully underwritten, you're going to get a link to my calendar, that's just me, where we're going to spend 30 minutes to an hour going through closing costs. Yeah, so I mean, that's the thing, if it's important enough where I have two solid days a week of back-to-back appointments where I am going through line by line with buyers, that's pretty important.
It's pretty important. So, the key with this is, that what a lot of lenders do is, if they're not competitive on rate, and if they charge higher fees, they try to avoid showing you what to expect with closing costs, because they know as soon as you see it, you're probably going to shop them, and they may lose, and they don't want to lose. So, they just kind of dance around it, right? It's like a distraction method.
You're like, well, wait, how much are closing costs? Oh, closing costs are about three percent. That's a cop-out, guys. If a lender, if you ask the lender, if you're already pre-approved, okay, because like, this really is best once you're pre-approved, because then we can talk, like, I want to talk to you about your debt to income, I want to tell you what the underwriter thought about you, I want to tell you everything. So, I gotta get it all done first. But if they say you're pre-approved with them, they go, oh, it's like three percent. No, no, no, you need a breakdown.
Okay, because you need to know, of that three percent, how much are they? Because sometimes what we'll see is the lender is a huge chunk of that three percent. You know, on an $800,000 house, there are very few states where the closing costs are going to be $24k, unless the lender is charging a big chunk of change, which is not necessary.
So, you don't want to let them cop out with the three percent. Now, if you're like, well, Jen, I don't really care about money. Okay, it's weird you're on this channel, but beyond that, okay, if they're too lazy to spend time with you to give you a closing cost breakdown and explain what it means to you, what else are they going to be lazy on with your file? Are they going to be lazy if the underwriter pushes back? Because we see that too. That's the other crisis calls that I handle on the weekend. It's usually because a lender is declining someone, and I'm talking to them going, well, did they do this, this, this? No, they just said they can't do anything.
Okay, well, call the other lender, tell them to try this, this, this, and this, and then usually I'll hear back like, oh Jen, that worked. Okay, guys, the lender was lazy. The lender didn't know what to do. Their lender was too lazy to give them a closing cost estimate. Their lender was too lazy to fight for them.
The other part that it can lead to is if rates go down, right? Like, I did a video a couple of weeks ago about how rates went down for a couple of hours, and so my team and I were renegotiating everyone in contract who qualified for a renegotiation to get a lower rate. So, if that lender is too lazy to give you a closing cost estimate, too lazy to fight for your file, do you think they're going to have the energy to lower your rate without you asking? No, no, of course not. Why would they do that? I mean, they can't even give you a closing cost estimate. Why would they do that? Right? Like, laziness in one category leads to others. It's not like people are just lazy in one, it's usually pretty consistent.
And I know I'm being very brutal here, but it's something that really frustrates me about my industry. Because people have a very bad impression of lenders, due to this type of behavior being allowed to occur. Okay, and there are some lenders that honestly, they don't even know they should be doing this. So, I do have a lot of baby lenders that watch me. I love you guys, I'm glad that you guys are trying to learn how to do this the right way.
You guys need to schedule time to go through the closing cost estimate with your buyers. If I'm able to put aside that time, think about what I do, right? Like, you know, last year I closed over 240 million in loans. I have YouTube going 24/7, TikTok, all this stuff that I'm doing, right? I am still setting aside half an hour to an hour with every client of undivided attention, going over this, going over their debt to income, going over what the underwriter thought, going over best practices to get through. If it's that important for me, it's that important for you.
And as buyers, guys, it's important for you that the lender spends the time to do this with you. It will make you more educated and more empowered, and you won't end up in a situation where you get into a contract, you see the closing costs, you go, "I can't afford this," or you see the payment and you go, "Oh my God, I didn't know. I just been looking at the calculators. I didn't know about taxes and insurance. I didn't know about the HOA. I didn't know, I didn't know." Well, of course, you didn't know, because your lender didn't take the time to prepare you.
So, I can't stress this enough, it's a lender red flag. I do not know why anybody works with lenders that are that lazy. If you guys are having trouble, I am licensed in 48 states, I have a big team, we take great care of people. Check out our Google reviews, and the last thing we are is lazy, and we're not going to let you fall down during your home buying journey.
So, stop rewarding these people with your business if they're not going to give you a loan summary, if they're not going to spend 10 minutes to break it down. Let me tell you right now, they're not too busy to do it, they're too lazy to do it. The top lenders in the country who do the most business, most of them are doing exactly what I'm doing, or they have someone on their team doing it. They are not sending you guys out into the middle of the day to find a house and fall down.
Okay, so a little bit of a passionate video, but look, this is what my weekends consist of when I'm trying to relax. It's constantly dealing with issues from other lenders that could have been avoided if the buyers had seen the red flags and walked away. So, you guys have seen this video, you know the red flags. If you have questions, comments, you want to get qualified, of course, reach out. I am here for you in every state except for Rhode Island and Utah. And look, if you guys are in those states, I'm sure I can help you find someone at my company that will take good care of you.
So, thanks for watching, and I hope you guys are doing well.