Welcome to the first Chris Clark Q&A!
I’d like to thank the first few people who asked questions! Because this is our first Q&A session, I’ve decided to give all the questioners gift cards! Congratulations to Johnathan McGuire, Tami Peabody, and Jamie Gipson! Please fill out the contact form below and I will get your gift card to you! Now, on to the answers!
Submitted by Johnathan McGuire:
Q: I want to know how mortgage lenders make money. Is it just off the interest or do they actually sell your loan to a “big” bank for commission?
A: Depending on the lender type there are several ways mortgage lenders generate income. The process essentially works like this:
- The home loan is acquired by the mortgage lender/bank.
- The home loan is grouped up with other loans of the same general type/values.
- After being grouped together, the loans are verified by the government, insured and sold to an investment company.
- The investment company either holds the loans for a guaranteed return, or sells them later using virtually the same system.
There are always exceptions to the rules, but that’s basically how the process works. Each different mortgage company charges fees for each service and gets paid commission by the investment companies. Most mortgage brokers (the faces you see when getting your loan) are paid commission by their company depending on the above factors. Thanks for the question!
Submitted by Tami Peabody:
Q: How detailed should disclosure get when selling a home (e.g. oven light needs replaced)?
A: The purpose of the selling disclosure is not to “nit pick” little things that need replaced, but rather to identify potential problems with the home. Any home will need bulbs replaced, outlet covers fixed, etc. What you need to disclose are potential problems: roof leaks, basement seepage, slow plumbing, etc. Identifying potential home owner problems is the primary purpose of the seller disclosure! Don’t worry about the light bulbs! Common sense goes along way towards completing your selling disclosure forms!
Submitted by Jamie Gipson:
Q: After the house enters escrow, is the homeowner responsible for paying the mortgage for that month if the house doesn’t close officially by the end of said month?
A. Yes. Except in very unique scenarios, all mortgage fees, insurance, utilities, and taxes are the responsibility of the home owner until recorded. After the home is deeded to the new owners and the courthouse stamp is on the document, the current owner is responsible. This is why we always advice keeping the purchaser out of the home until after close! If someone is injured while they are moving in, your insurance will pay for injury! Make sure you aren’t responsible for the home when the new buyers move in!
Thanks again for the questions and keep them coming! I would love to do the Chris Clark Q&A Weekly!