A First-Time Home Buyer’s Guide to Shopping for Home Loans
Updated: Jan 6
a home is a big deal. It’s scary and exciting and comes with a multitude of tasks. One of the most important things you need to do as a first-time homebuyer is shop for home loans. This gives you the opportunity to possibly save thousands of dollars on your mortgage. You should never go with the first lender you speak with. Here is a quick guide for first-time home buyers shopping for a home loan.
Ask for referrals
Start by asking someone you know who has recently purchased a home. Ask who they used for their lender. Ask a financial adviser, colleague or real estate agent to give you a quick list of referrals. An agent will be able to provide you with a few options. The best option is to ask homeowners who will have an unbiased opinion.
A pre-approval allows you to confirm how much you can qualify to borrow for a mortgage. This also positions you to make serious offers when you find the home you want to buy. For a pre-approval, the lender will verify the buyer’s application info provided through income and asset documents provided by you or retrieved from the mortgage company. The most important thing is to take the time to provide everything needed for a thorough pre-approval process.
Do Your Research
The internet has made the mortgage selection process, making rate comparisons a fast and easy first step. It is important to look beyond the initial rate and dig a little deeper into the fine print like what the closing costs are, hidden fees and down payment requirements. A great resource for evaluating lenders is to read online reviews on sites like Facebook, Zillow or Google.
Evaluate Rate, Service, and Speed in Processing the Loan
The internet is full of “discount” mortgage financing options with exceptional rates, but they often have a prolonged close and can’t offer you the level of service you need. On the other hand, there are large national companies that will offer great service and value but won’t give you a competitive rate and the service you do receive may not be on the same level as from a local company. It is important to do research before choosing a mortgage lender because you want to ensure you get the highest quality and service along with the best rate.
Work With Your Agent, But Take the Lead on Selecting the Lender
Your agent will serve as your partner in this process, but it is important to choose your lender based on your findings and not just on who your agent believes you should go with. Take their advice, but also make sure you are going with who you feel most comfortable with.
A mortgage loan is one of the biggest financial decisions you will make in your life. You want to make sure you take the time to get all the facts before choosing a lender. It ultimately comes down to finding the lender who can offer competitive rates, offer great service and quickly process the loan.
If you are in the market to buy in our area, contact me today! I’d love to hear from you.