Unless you are paying cash for the home you want to purchase, you will be working with a mortgage lender. Your closest relationship will be with your loan officer, who should be someone you feel comfortable with, who will answer all of your financial questions, and who will walk you through the lending process.
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Prior to officially starting your home search, you will need to consult with at least one to three mortgage lenders or loan officers to compare their rates and fees. You will want to make sure that you are not only choosing to work with a person with whom you have a great rapport and feel comfortable, but also that you are getting the best interest rate your credit score and choice of loan program will allow and that you are paying reasonable fees for those services.
Have a pre-qualification or pre-approval letter from a lender will help you in a number of ways:
- You will have a clear idea of what you can afford and how much money you will need to close on your new home (down payment, closing costs, prepaid escrows, etc.)
- Your REALTOR® will be able to more confidently show you homes, knowing that you are a serious buyer who has taken the step of getting pre-approved.
- When the time comes for you to make an offer, the seller will view your offer more positively because you have taken this step.
When interviewing lenders, there are some questions you should ask, in addition to finding out about current interest rates and fees:
- How long have you been a loan officer/mortgage consultant?
- How long have you been with your company?
- How long does it take to process and close a loan?
- What types of clients do you work with mainly?
- Do you have a real estate agent, title company and insurance agent you work closely with?
- Do you live in this marketplace? Are you available to meet with me before I make a decision, and will you be attending closing?
- Do you have competitive rates and closing costs?
As your REALTOR®, I can recommend mortgage lenders who have come highly recommended to me from clients who have used their services and even put you in touch with my past clients so that you can receive first-hand testimonials for those lenders. I also highly recommend that you ask your friends and family for referrals to lenders with whom they have worked, and you should also consider talking with a representative from your personal bank.
Once you have made an offer on a property, you will need to make a final decision about whom you’ll be using to obtain your loan. It’s a good idea to get back in touch with the lenders you had consulted with in the beginning of the process and check their interest rates and fees again, as these things may vary day-to-day. You will then choose the one who works best for you, considering not only interest rates and fees, but also your comfort-level with each loan officer and how accessible and responsive they have been to your calls and emails.