A few months ago I asked about getting a mortage from an individual (typically a family member) rather than an institution. One reason to keep a loan "within the family" is to save money. Another one is that mortgage lenders are a nuisance, in my experience. It appears that they don't do any work to process the loan until about a week before closing, at which time they may suddenly make demands. For a Wednesday closing, I was only told on Tuesday about 2pm what the exact amount due was. The lawyer who sent me the HUD statement (which lists all the costs in the real estate transaction) never sent it to seller's realtor, and when they arrived at closing, they were shocked to see that they were paying $8000 more in fees than the expected. There was an error in the HUD, which would have been corrected earlier if they had seen it. Correcting the HUD at the time of closing required approval of the lender. The closing took about 4 hours, including a change of venue so that documents could be reprinted.
I'd like to buy my next house for cash, and if I want to exploit my home equity and the mortgage interest deduction, I should be able to take out a first lien mortgage, without any time pressure, after I have purchased the house. This may be an unrealistic goal, but I think avoiding the stress of dealing with a mortgage lender near a closing may be worth a few thousand dollars. I'm not against lenders doing their due diligence and verifying income, assets, and home value, but they should do their underwriting ahead of time.
Not really asking for advice, just venting.
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