Well I am glad I received a pre-approval in person instead of the computer

Today was a real eye opener. We found out DH had a bill in collection which we never knew about, the banks were not giving us pre-approvals because we are receiving money from TOB/LIHP for their first time homeowners program and we didn't get our formal approval letter which complicated things - BUT in the end we were approved.

Have to take care of the bill in collections, forward the approval letter to the bank and we have to work a BOAT load of over time or freelance work to pay for all the extra's no one ever told us about.

Things we knew:
Down payment
Closing costs
Contractor & Lead Paint specialist
Our own real estate attorney

Things we didn't know:

We are paying 3K in the closing costs to the government for taking a FHA loan.

Need to pay all up front the rest of the year's taxes and home owners insurance (THIS WAS THE BIGGIE we didn't know about) from the day of closing until the last day of the year!

Then we have to have two months of mortgage payments in the bank otherwise the bank will not close. (this we have taken care of thank god)

If we didn't walk in there no one would of told us about these extra costs and we would of been blind sided over them. So for those who didn't know make sure you really find out EVERY cost before house hunting.

Re: Well I am glad I received a pre-approval in person instead of the computer

We're taking out an FHA loan also and are actually closing on Wednesday. I didn't know we have to pay our taxes in advance. Are you sure????

Re: Well I am glad I received a pre-approval in person instead of the computer

See this is why I think it's scary - that is what he said and I said please clarify and my husband was FREAKED and he said yea!

That is why I am posting it if it really is true - people should be informed because it's not cheap to pay things upfront like that with no warning. Call you bank and see - I am kinda interested now for a second person input.

I am just going to ask the seller to pay the taxes when we put an offer on the house - we don't have that extra money right now.

Message edited 5/3/2009 8:32:47 AM.

Re: Well I am glad I received a pre-approval in person instead of the computer

I found this online:
The pre-paid items involve upfront payment of typical "year one" costs of home ownership. The most common items are homeowner's insurance premiums and real estate taxes.

And also i read the print out they gave me with the break down of the pre-approval not sure if you got one of these and it says 1 year of insurance and how many months for taxes to be paid and added into closing costs. So its a deff. when closing.

Message edited 5/3/2009 9:15:42 AM.

Re: Well I am glad I received a pre-approval in person instead of the computer

Re: Well I am glad I received a pre-approval in person instead of the computer

We will also be pre-paying the taxes for the year but this was included in our closing costs.