Mortgage Mania

[curioustoo1]

What is the name of your state? Washington
1.) Can a mortgage company charge you a certain percentage point more if you don't elect to go with escrowing your taxes and insurance?
2.) Can a seller require you to put down double the amount of earnest money if you elect not to use there home loans? Therefore requiring you to use them instead.What is the name of your state?

[efflandt]

1.) Apparently many do charge a higher interest to NOT do escrow (maybe because they cannot use your free money). My original loan in 2002 escrowed property tax only (I paid my own insurance). When I refinanced early 2005, they gave me an interest bearing checking account to auto pay the loan (saving 0.25% interest), do my own escrow, and write my own tax/insurance checks (assuming to just confirm that it was being done). The checking acct only pays 0.9% interest, but better than nothing. Seemed like a good plan, so I bought stock in my lender.

2.) You are perfectly free do negotiate or walk away before you sign anything or hand out any money. Assuming the deal goes through without a hitch, you are not actually losing the earnest money (it goes towards down payment). But the question is, will their lender give you as good of a deal as you might get elsewhere (or change their terms when too late to get out of it)? How much are they asking for earnest money? When I bought my home in 2002, $1000.00 earnest money sealed the deal (nothing more until closing except my attorney, inspection, and loan application).

But I knew someone who bought a townhome from a builder and financed through a related finance company, and she was clueless what to do when they jacked up her interest rate and payments at closing. So she got ripped off. Buyer beware.

[pojo2]

How much are they asking for earnest money? When I bought my home in 2002, $1000.00 earnest money sealed the deal (nothing more until closing except my attorney, inspection, and loan application).

Homes I am dealing with in So. Co.require from 5K to 50K in earnest money so the figure is no where near set in stone and is more to a norm for your area.

But I knew someone who bought a townhome from a builder and financed through a related finance company, and she was clueless what to do when they jacked up her interest rate and payments at closing. So she got ripped off. Buyer beware.

Why is it when someone freely signs paperwork that is not as they were told and put themselves in an awful situation financially, all without benefit of a gun pointing at their temple, it is called a "rip off" instead of personal stupidity?

[PghREA]

1.) Can a mortgage company charge you a certain percentage point more if you don't elect to go with escrowing your taxes and insurance?

Many do. You are free to shop around for one that doesn't.


2.) Can a seller require you to put down double the amount of earnest money if you elect not to use there (did you mean their - referring to the sellers?) home loans? Therefore requiring (requiring or just a better interest rate?) you to use them instead.

Yes. It is called negotiating. The seller can ask for anything, you are free not to do what he asks.