The First Step in Buying a House
I hear it all the time, “Eric, I want to buy my first home, but I have no idea where to start!”
Most people start out by browsing for homes online. This process typically starts 3-6 months before a buyer is ready to actually start looking at homes. The next step they should take is seeking out a local mortgage professional to get prequalified for a loan. The timing of this is very important, and should really take place before you start browsing for homes online. The reason I would suggest that many people are putting the cart before the horse when they start out by looking online vs talking to a mortgage lender is because you need to know how much home you can afford.
I’ve seen many buyers assume that they would be qualified for a certain amount, and then start looking at homes in that price range and falling in love with several only to discover that they either couldn’t qualify for that amount, or that they can’t qualify for a loan at all at that time. If you assume that you can buy a $400,000 house and you fall in love with one, it will be difficult to get that same feeling when you have to start looking at homes under $325,000, for example. So, it is best to start out by getting qualified with a local mortgage lender so you’ll know exactly what you’ll qualify for and can start your search based on that information.
The Importance of Using a Local Lender
Does it really matter if you use a local mortgage lender? The answer is, YES! As an experienced agent who has done hundreds of real estate deals, I can tell you that not all lenders are created equal. There are companies like Quicken and Rocket Mortgage who promise the lowest rates, but that often comes with a sacrifice: Customer Service and Higher Fees. A home is one of the largest financial investments you’ll make, so wouldn’t you like to be able to go sit in someone’s office face-to-face and be able to ask questions and make sure that you are getting the best service, and lowest rates and fees possible?
Another advantage of using a local lender is that they will have relationships with local appraisers, which will keep a deal moving forward to close on time. I have seen more delays in closings due to an out-of-state or online lender not being able to get an appraisal ordered and received in a timely manner, which can cost the buyer more money, or the risk of the seller termination the deal.
Out-of-state and Online Lenders often have additional requirements for buyers and sellers that are not required by local lenders. An example of this is if the lender is based in a state that requires radon gas testing, or a pest inspection (on top of the typical termite inspection) the buyer will not only get charged more for these inspections, but the deal can take longer to satisfy the requirements of the lender, which can lead to a delayed closing.
Don’t let your dream home get away from you! We can refer you to the Best Local Lenders in Northwest Arkansas who can answer your questions and advise you on the best type of loan for your needs. Contact us today!