There are different ways to go about things, and home buyers’ preferences for house hunting are no different. Sadly, we witness many disappointed home buyers who already set their mind on homes that are beyond their qualification. Here are reasons why you should speak to a lender before house hunting.

  1. It sets realistic expectations
    There is nothing worse than finding your dream home, then realizing that it’s just outside your financial reach. Additionally, getting an online quote is not the same thing as being preapproved. A preapproval letter from a lender proves to both real estate agents and sellers exactly what you can afford.
  2. You will finish the paperwork early
    You will need a lot of paperwork to complete the loan, including W-2s from the past two years, pay stubs for the last 30 days and recent bank statements. Starting the document-collection process earlier will make it easier when it is time to finalize your loan.
  3. It helps to know your closing costs
    After you apply for a mortgage, the lender will give you an idea of how much origination fees, title fees and appraisal fees will cost. While the seller sometimes pays some of the closing costs, your share could still be as much as 3% to 6% of the loan amount.
  4. It helps catch seller’s eyes
    Coming in with a preapproved loan officer, whether you are talking to a real estate agent or a potential seller, proves that you are serious. You want to present yourself hassle – and complication-free, especially in competitive real estate markets. You are not “just looking” and a seller can trust you can actually sign the check.

Which Comes First, the lender or the real estate agent?

Both the lender and the real estate agent are essential pieces of the real estate transaction. Which comes first is the chicken or egg debate of real estate, but it is important to consider if you will need financing to help you purchase a home.

Buying a home can be a very emotionally charged experience, and there is nothing worse than having your chances for your dream home dashed by the reality of mortgage qualifying guidelines.

 

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