By: Kyle Spearin
Imagine that you’re walking in the dark without a flashlight. What do you think would happen?
For many people, buying a house is a lot like walking in the dark. It’s very difficult to find your destination when you don’t know where to go. The best way to shed light when buying a house is to find experts to do the navigating for you.
Before you begin to house hunt, you should start building your team. This team of real estate experts can guide you through the home buying process and play essential roles along the way. Getting this team into place will help you avoid stress and
focus on finding your dream home.
The first team member that you should have in place is a lender.
In this article, you will learn how to differentiate between options and find the right fit. Be sure to choose wisely!
Why Do I Need a Lender
Despite being in the earlier stages of the home buying process, it’s very important to have financing lined up. This minimizes hiccups along the way--there’s nothing worse than finding a home you love and then having financing fall through.
A great way to ensure that your financing options are solid is to find an expert in this field.
Following the traditional path to purchasing a home, your lender will inevitably be a bank, credit union, or something to that effect. The person you’ll be dealing with directly is called a mortgage broker or loan officer. These people review offers from a variety of bankers and lenders to find
the best deal or work for just one institution.
At the beginning of the home buying process, these are the people that issue a pre-approval.
It basically states that they are willing to lend up to a certain amount of money to purchase a home based on a variety of factors. Having a pre-approval helps your case when you put an offer on a house because it lets the seller and their
realtor know that a bank will back you.
During later junctures of the home buying process, these people work with your lender to make sure the loan is approved. They will collect various pieces of information from you to limit the risk of you defaulting on a loan. In addition, they
will be in constant communication with your realtor so that there is (hopefully) a clear understanding of what is needed at that point in the process.
A mortgage broker or loan officer is an essential team member.
Finding the Right Lender
Before committing to one lender, you should interview at least three. You should ask for recommendations from friends, family, and your realtor. These people want what’s best for you, so they’ll only recommend someone if they had a good experience
with them in the past.
The referral is only a starting point to get you headed in the right direction; you need to complete your own due diligence as well. As you begin interviewing mortgage brokers and loan officers, you should look for evidence that proves their competence.
To do so, there are some key characteristics you should look for.
Communication is the cornerstone of any great relationship. You need to find a person who can prove that they have strong communication skills.
One way to tell if a person is going to be the right fit is their responsiveness. Real estate transactions require communication between several parties. Any delay along the way will inevitably impact the remainder of the people involved.
When you reach out to referrals, pay attention to how long it takes to respond. Since they are going to want to make a great first impression, this is an excellent indicator of how a person will perform at their best. The faster they respond,
Another element that you should consider is how they communicate with you. In general this type of business communication comes in one of three forms: text, email, and phone call. A great communicator knows when to do each of the
above. For example, when you have an urgent question, a call is probably best. The best in any business will also follow up with an email and additional information.
When you begin interviewing multiple, it will become clear who the best candidate is.
When choosing a mortgage broker or loan officer, you want to find someone who knows what they’re doing. They should know the ins-and-outs of the loan industry and should be able to anticipate potential questions you have.
At the start of the home buying process, you will probably have a lot of questions. For instance, you might be wondering why they need certain information to complete a pre-approval. A great lender won’t just ask you to fill out the form,
they’ll explain why. As you go through the process, they should be teaching you about the process so that you can make informed decisions.
A tell-tale sign that someone has experience is if they can anticipate questions. Anyone with industry experience should address your concerns before they even become concerns. This might happen in a phone conversation where they describe
the lending process to you. It could also be a follow up email that has resources to further your education.
Overall, a loan officer or mortgage broker with a depth of knowledge will make it easier for you to ask questions and feel less anxious throughout the process.
Although your loan officer or broker will probably be great with numbers, you also need someone who is creative.
They should be able to understand your needs and figure out what suits you best. Finding the right loan is one example of this. There are certain loans that work better for first time home buyers, such as an FHA loan. Other loans may suit people with higher credit scores. It’s ultimately up to you which loan to go with, but they should provide
Additionally, creative loan officers and brokers should know how to manipulate numbers to your advantage. This doesn’t mean falsifying documents, but it does mean that they know the system. They might know how to improve your debt to income
ratio or find a program that helps give you money back at closing. These aren’t things you would know unless you were in the industry.
Having a creative loan officer or broker can save you significant amounts of money and help you find the most financially savvy deals.
If you’re looking to buy a house in Texas, you need to have a mortgage broker or loan officer in place from the start. These people will make the home buying process much easier and stress free.