How well do you know your Real Estate / mortgage jargon?

1. What is PITI?
2. What is LTV?
3. Define COE
4. What does FICO mean?
5. What is an REO?

Real Estate FAQ:

1. Should I get a preapproval before I find a home or after?

Start Shopping for a loan after your initial consultation with a Real Estate professional. After you find a home, you might need to make an offer in a short period of time to avoid losing the home to your competition. If your contract is accepted, your clock starts ticking and you won’t have time to shop around for the best rates!

2. Will shopping with multiple lenders / mortgage brokers drop my credit score?

Yes, if your credit pulled several times within a short amount of times (a span of few weeks), it could adversely affect your score. The workaround is you do a credit check yourself or allow the first lender to run a credit check and use that report to shop rates with other lenders/ broker. DO NOT authorize multiple credit checks.

3. What happens if I make an offer on a home and the bank appraisal falls below my offer price?
   • If you and your agent disagree with the appraisal value, support your price with recent sold comparables
   
   • Get another appraisal with a different appraisal company
   • Go back to the sellers and renegotiate a lower price
   • Accept the appraisal value and pay the difference to the lender out of pocket
   • Back out of the contract

You have a few choices:

If none of the options work because you were caught in a multiple offer situation, and contingencies were waived, don’t panic! Most people purchase homes for the long haul and and as long as you can afford the payments now, chances are great that your home will go up in value in the long term.

Also, most importantly, appraisal values are very subjective because lenders are very conservative. So just because the appraisal fell a little below your price doesn’t mean your home actually dropped in value in the one week after you made an offer!

4. What inspections should I get on a home?

Typically a Home inspection, Pest/Termite inspection and a Roof inspection are advisable. Of course, if the home is newer and has a recently changed roof with a warranty, you may skip the Roof inspection.

If the home is older, additional inspections like soils and foundation, structural inspections might be needed.

5. Can I make offers on 2 or more homes simultaneously?

Not a good idea. By doing so, you are conveying to the sellers that you’re not serious about any of the homes you have submitted a bid on. Also, if either of the other parties find out about the simultaneous offers, your offers will be disqualified immedietly.

6. What if I come across a nicer home after I’ve submitted an offer on a home?

The proper way to handle this is to withdraw your offer on the first home and then make an offer on the other home.

7. What if this is a short sale scenario?

If the lender has not responded to your offer within a given time frame, move on and look at other properties. Do inform the lisitng agent that you are no longer interested in the home.

8. Is a Short sale completed in a ‘Short’ period of time?

I wish that were the case! A Short sale is called thus because the lender is cutting their losses short and agreeing to sell the home for a price below the loan amount they are owed. The process itself could be very long stretching from a few weeks to a year or more before getting a response to the purchase offer from the lender.

9. Is a foreclosure sale a faster way to purchase?

Yes, lenders are usually very motivated to get the property off their books because it costs more to hold on to them. So once you make an offer on a foreclosed home, you get a response within a few days to a few weeks, at the most.