You have decided to purchase a home…great! Unless you are paying cash for a home, one of the first steps you need to take in the home-buying process is to get your financing in order. This will save you from wasting time looking at homes that are not within your buying range. Most sellers won’t even consider an offer being made on their home that doesn’t have proof of financing in place.
Lenders are not created equal. Different lenders have different programs and specialize in different types of loans. For example, some lenders have amazing programs for buyers who are Veterans. Others might have excellent down payment assistance programs. Therefore, it is important to know what questions to ask a lender to determine if they are the best fit for you. It’s just fine to meet with more than one lender to find the best fit too!
Here are some important questions to consider asking a possible lender:
1. Are you a mortgage broker?
This means the lender works with a number of different companies in order to get the best rate and options available to consumers. Mortgage brokers can sometimes find you a better rate than other lenders that don’t work with multiple sources. But this isn’t always the case.
2. Do you offer down payment assistance programs?
Are these programs loans or grants? Whether they offer a loan or grant program can make a large difference. If you receive a down payment loan and end up selling your home in the near future before your down payment loan is paid off, that loan will need to be paid off at closing. Whereas a grant usually won’t need to be paid back.
3. What fees do you charge?
Lenders charge different fees. Sometimes you can save money by choosing a lender with lower fees.
4. Do you run different loan scenarios to determine what would be the best option for me?
Some lenders will plug you into a program and never look back. Other lenders are very good at looking at different lending options to find the best one out there for you.
5. When I find a property I am interested in writing an offer on, will you create a loan illustration for me so I know approximately what my monthly payment and closing costs will be?
This is very helpful and will put your mind at ease when considering making the largest purchase of your life.
6. Are you easily accessible if I have questions or concerns?
Some lenders are easy to get a hold of and ask questions to, others are not. You want to make sure you have a lender that will walk you through the entire process so you aren’t left feeling confused and overwhelmed.
7. Are you willing to call a listing agent of a property I am putting an offer in on?
With the real estate market being so competitive, it often helps when putting in an offer if the lender gives the listing agent a personal phone call explaining how well qualified you are and how confident they are in you being able to close on the property. This puts listing agents and sellers at ease and can often help you win in a multiple offer situation.
Sara McConnell is the Broker/Owner of EXIT Realty Homefront in Zimmerman, MN. Sara McConnell is not a lender. The questions above are important questions Sara feels will help buyers when in the process of purchasing a home. If you are interested in purchasing a home, contact EXIT Realty Homefront at 763-856-0195 or firstname.lastname@example.org.