February 6, 2007 at 10:30 pm
· Filed under Buyers, Mortgage Bites, Real Estate Bites, Sparks from Sparky
This is the first in an on-going series of articles dedicated to helping 1st Time Home Buyers successfully achieve their purchasing goals. Each time, we’ll identify and discuss, in chronological order, key events in the home buying process.
Today’s topic: Mortgage Lending and Loan Pre-Approval
The first step in your home-buying adventure should be to find an experienced mortgage loan specialist. Before you start the home-search process, you need to know if you’re in a position to purchase a house, and at what price. A seasoned mortgage professional will be able to review your current financial status and determine if buying a house is a realistic and prudent goal for you. Sometimes, people need to pay-off some outstanding debts first, or repair a past credit problem. A qualified loan specialist can help you to formulate a game plan for working through these issues. The next step is to help you select a loan product this best suited for your specific needs. Years ago, buying a home required a substantial cash down payment. Now days, there are many creative programs available, specifically for 1st Time Buyers, making it easier than ever to qualify for a home purchase. Once your mortagage specialist has reviewed and verified all of your financial information, and helped you to select a particular loan product, they can then determine a suggested price range to fit within your budget. This price range will serve to drive your home searching process. Many times, a loan pre-approval letter can be provided by your lender, helping to better portray you as a strong, qualified Buyer.Here are some helpful suggestions:
-
Identify,
interview, and
evaluate at least 3 different lending sources. Obtain
recommendations from your
real estate agent or friends.
-
Ask lots of questions. My illustrious colleague,
Buckwheat (Mark Flanders), with
Olympic Northwest Mortgage, says there are 3 key elements to finding a good loan specialist: They need to be
knowledgeable and willing to take the time to
educate 1st time buyers. They need to have the ability to
empathize with people, understanding their individual needs and issues. And there needs to be a relational
chemistry between the Buyers and their mortgage specialist.
-
Use a local lender. It makes sense to work with someone who knows the nuances of your particular market and can respond quickly to any issues that may arise. It’s also easier for area agents and title/escrow offices to coordinate the transaction with local lenders.
-
Don’t shop for lenders based solely on the interest rates they quote. Just because someone offers you the lowest rate doesn’t always make them the best choice.
Having a knowledgeable mortgage specialist as part of your team will help you to successfully achieve your home-buying adventure!
Permalink
Buckwheat wrote @ February 7th, 2007 at 5:01 am
Great article Rich. I’ve been hoping you would publish a series like this since we started the site. The process of buying your first home can be intimidating. But like many other complex tasks, if you break it down into bite-sized steps, it becomes less scary and more achievable.
Sparky wrote @ February 7th, 2007 at 7:16 am
Hey, Bucky! One of the most fun and satisfying parts of being in real estate is working with 1st Time Buyers. There are few greater joys that helping someone realize that first home purchase. My desire is to write these articles in everyday language that is easy to digest and practical.
Melissa wrote @ February 14th, 2007 at 1:33 pm
Nice site - This is my first visit and I really like what you have here; simple to read and informative info!
I think in addition to finding a good lender, a borrower must also educate themselves thoroughly on the loan process and the different mortgage programs that are available out there these days (since the plethora of loans available can be overwhelming!) This can not be emphasized enough. The more information and knowledge that borrowers arm themselves with, the better they will be at identifying any “shady tricks” or fraud.
Because although most people in this industry have good intentions to help people with their mortgages and the whole home buying process, we all know that there are some bad seeds out there.
Sparky wrote @ February 15th, 2007 at 3:27 pm
Melissa, thanks for your ‘1st’ visit. I hope that our future content and fun navigation will keep you coming back. A good mortgage specialist will be knowledgeable about the various loan products that are out there; discuss the borrower’s options; and help them to assess which loan program best suits their specific needs. A willingness to be open, forthright, and transparent is key with today’s sophisticated and smart consumers.
Good article guys…
“Ask lots of questions. My illustrious colleague, Buckwheat (Mark Flanders), with Olympic Northwest Mortgage, says there are 3 key elements to finding a good loan specialist: They need to be knowledgeable and willing to take the time to educate 1st time buyers. They need to have the ability to empathize with people, understanding their individual needs and issues. And there needs to be a relational chemistry between the Buyers and their mortgage specialist.”
This is critical for buyers whether this is their first or tenth deal and I always push using local lenders.. thier cousin who is 100 miles away may be a nice guy but he can’t offer them the service a local lendr can…
Sparky wrote @ February 15th, 2007 at 11:40 pm
Kaye, thanks for visiting and for your input. Good service is important. Face-to-face ‘real’ relations is too. If there’s an issue or problem, I would want to know who to call; that they’re accessible and responsive to my needs.
Nice post. I’m so glad that you added to not shop by rates. If someone has found a lender based on the other criteria you mentioned, a competitive rate should follow.
Sparky wrote @ February 21st, 2007 at 12:32 am
Thanks, Rhonda. Good point. It would seem to be a logical progression!
[...] This is the second installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process. In the last post, we talked about Mortgage Lenders and Loan Pre-Approval. [...]
[...] I am not alone. Tony Gallegos, in a recent post, refers to a really wonderful post about the same idea. One of the main points: don’t choose your loan officer by (only) interest rates. If you want the lowest payment, an interest only program may be for you, though that 5-year ARM with an interest only payment will have a higher interest rate than the same ARM with a principal and interest payment. There are many, many examples of choosing a program with a higher interest rate [...]
ketchum wrote @ September 24th, 2008 at 1:18 am
ketchum…
Joel, let me clarify what I meant by“ staging” in my earlier comments. Staging is not just putting furniture in a home before it is listed. Staging involves an evaluation of the condition of the property well before it is listed. Recommendations ar…
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