One of the most important steps in the home buying process is to find a great lender and get pre-approved for a mortgage amount BEFORE you start looking at homes. Why? I’ve written many blogs on this very subject, but it’s worth repeating:
- Most offers in this competitive real estate market won’t even be considered if a pre-approval letter from the lender is not included!
- Tells you how much you can afford so you can realistically know what you can spend on a mortgage, (including taxes and insurance), and still be able to put gas in your car, pay your utilities, buy groceries and go out to eat in a restaurant on occasion!
A great lender will inform you as to what type of mortgage is the best for you (what you can qualify for) and will work hard to get you the best rates. In other words, their job is to keep hounding you until they have all your documents in order so that you can be approved and lock in a rate! If you have a lazy lender who doesn’t seem to have any sense of urgency in getting your loan approval, you could end up paying a higher percentage rate (they’ve been ticking up lately!) or other points and fees! Time is money!
Not only is a great lender important when you are buying a home, it’s also important if you are selling a home. Your REALTOR® should be aware of (or at least be familiar with) who the Buyer’s lender is when an offer is submitted and know whether they are going to be easy to work with and thus, have a better chance of getting the transaction closed ON TIME.
A lender without integrity is someone you want to avoid at all costs! A great lender will be honest. They will tell you the facts… not necessarily just “what you want to hear.” If they feel you need to do a bit of credit repair and save a little more money before applying for a mortgage, take their advice! It will save you a lot of aggravation in the long run. A good lender will also be upfront about what they can offer you in comparison to what a Builder’s preferred or “in-house” lender can do; while taking in account any incentives that are offered. A few thousand dollars paid in closing costs or incentives by a builder does not outweigh what great interest rate and terms can do for you over the life of your loan! So, make sure you ask them to compare the entire mortgage scenario; don’t just be dazzled by a few bucks upfront.
Well, there you have it… a few reasons why it’s SO important to pick a great lender. And if you don’t know how or where to start to find one, ask your REALTOR®! We are the source of “all things real estate related” and will guide you in the right direction.
Happy buying, selling and investing!