Just about everyone who’s buying a home today needs a loan to purchase. There are a ton of different types of loans a buyer can choose from when looking to purchase their new home. The problem is lenders got a pretty bad rap after the housing crash and buyers don’t trust their lenders as much as their real estate agent. Let’s take a moment to discuss what you should be looking for in a lender and what they should be doing for you.
The first thing to understand is how the process of lending you money to purchase a home works. The larger banks that lend money are actually lending you money on the premise they will be selling your loan on the secondary market. This means they are qualifying you on the resale of your loan not really what you actually qualify for.
With that being said you should interview lenders just like you interview your real estate agents. They need to earn your business because there are a lot of lenders to choose from. The first question you should ask them if they keep their loans in-house or if they resell them.
Not all lenders work every type of loan. They also don’t do the same grant programs or the same first time buyer programs. All the more reason you need to qualify your lender, ask them questions about what loans they do and don’t do, and what they can do for you. Do they do the no-payback grants offered by the city? First-time buyer programs? FHA 203k loans?
Make sure your lender provides you a Good Faith Estimate. This is used to show you the purchase price of the home, your interest rate, seller concessions, origination points, lender credits, etc. Can your lender buy off your mortgage insurance? Will they pick-up your closing costs? Can they close in thirty days? Does your lender explain very clearly and patiently the process of how your loan works? If you’re a first time home buyer does your lender work with first time home buyers?
When choosing your lender to make sure they are willing to work with you. Make sure they are familiar with the loan you’re looking for and if not they will refer you onto someone who is familiar? They want to earn your business so have them either pickup your closing costs or your mortgage insurance. Make sure they are willing to think outside of the box, if they need to, and will do whatever it takes to make the loan work. That means working on the weekends, evenings, answering your phone calls, and returning your phone calls.
If you’re looking to purchase a new home you’ll probably need a strong lender in your corner to make sure the deal goes through. If you’re unsure of what to ask your lender, ask us and we’ll help you. If you would like a recommendation for a lender just ask and we’ll be glad to help you. We’d like to earn your business and that starts by helping you get the best lender for the best loan for your dream home.
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