Before beginning the home search, talking with a lender is a crucial move. Not only will you know the exact amount of home you can afford, but you’ll also have all your necessary documents in order which gives you an advantage in a competitive real estate market. I often have homebuyers who are uncertain about when to speak with a lender, or they come to me later in the process.
I’ve laid out five reasons below why it’s not only a smart decision to speak with your lender first, it’s necessary.
1. Match Your Budget to Your Home
You should have realistic expectations before beginning your home search. Talking with a lender first can ensure that you’re looking in the right price range. Blindly shopping around without knowing your budget can be a big waste of time and set you up for heart break if you’ve found a home you love but can’t actually afford. Talking with a lender can help match you with financial programs that can maximize your purchasing power while minimizing your out-of-pocket expense.
2. You’ll Receive a Referral to a Trusted Realtor Partner
A lender you trust is important when it comes to finding a trustworthy realtor. Lenders who are local to the market will have better knowledge of the local real estate community. So, instead of finding a random realtor online, your lender can refer you to an agent who both specializes in the area you are looking and the type of home you are looking for. An experienced lender will have plenty of agents they trust and have worked with in the past, so they can easily refer you to a realtor that they know will be a great match for you.
3. Puts You at a Competitive Advantage
Getting pre-approved before the home search is a great strategic move when it comes to buying a home. In a nutshell, a conditional approval letter will help your offer stand out because it shows the seller that you can act quickly and are confident in your negotiation. Being prepared and knowing what your financial limits are can help eliminate any sense of doubt a seller may have in mind because it shows that you are serious about buying the home.
4. Expedite the Home Buying Journey
The mortgage application process can take some time, even for more experienced home buyers. Once approved by a lender, you may be able to close on a home in as little as two weeks. Having all the paperwork done and out of the way before house hunting allows you to settle on your dream home right away without worrying about any potential roadblocks.
5. Help Control Your Financial Future
While a relationship with a realtor typically only lasts a short while, a relationship with your lender lasts the length of your mortgage. That’s why it is important to find a lender you have a good relationship with and trust handling your finances. A good lender will also reach out to you if rates drop and give you an opportunity to save money through a refinance.
If you have additional questions regarding your financing, or general questions about the home buying process, be sure to reach out. I’m always happy to help you on your path to homeownership.
Brad is a Senior Loan Officer at First Heritage Mortgage with over 20 years of experience in the industry. He enjoys getting to personally know his clients and educating them on all aspects of the home buying process. Have questions about homeownership? Contact Brad or get started online.
This is not financial management advice. Please consult your financial advisor for financial management advice. The included content is intended for informational purposes only and should not be relied upon as professional advice. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 6/13/2019.