An estimate is just that...an "estimate". In today's society we've all learned to look for bargains. When you are looking for a contractor to work for you, you will most likely want the lowest estimate. The low man usually gets the job. Consumers look for the same in financing. You "shop" for your mortgage gathering three or more estimates. How do you choose which mortgage company you are going to use?

1. Taxes & Homeowner's Insurance - To accurately disclose he should know a little more about the property such as what the real estate taxes and the homeowner's insurance costs are. We do the homework on the property before we release an estimate. In Florida, we will often OVER estimate the homeowner's insurance for a worse case scenario. The buyer sometimes will find his insurance at a more reasonable cost and his expenses are lowered.
2. Escrow Accounts - If a professional has closed enough loans, he knows how many months of taxes and insurance need to go on the estimate!
3. Additional junk fees or higher fees than anticipated. This area seems to have the most abuse in underestimating. The loan discount fee, loan origination fee and mortgage broker fee should not change without the borrower's knowledge. If the loan amount has changed or the borrower chooses to pay an additional discount fee to lower his interest rate, a new estimate should be delivered and signed by the borrower to acknowledge the change. This procedure is required by HUD and federal law (RESPA)!
Why did your mortgage professional underestimate your costs? Simple! He either is new to the industry and just "didn't know" OR he just wanted the job. A poor salesman will tell you what you want to hear and worry about the consequences later. You won't know until the end. What will you do? Walk away from the table or fork over the additional funds? Neither is fair!
Make sure you are not the next victim of Bait and Switch. Better call JoAnn Papsidero 321-243-4917 or email me at JoAnn@myFLdreamhome.com