Looking & Loans
Looking Or Loan First?
Depending on your personality, you are likely to either want to dive into the process of finding a home with everything you’ve got and figure our the financing after you find your dream home or, spend countless hours finding the best possible financing and terms, before you ever look at your very first property listing. While both positions have merit, it is the balance between caution and reckless abandon that will likely capture the prize in your hunt for that special place to call home.
Planning to succeed without stalling out…
There is a great deal to be said for being “the early bird”, but finding the property you want to live in before understanding how much house you can be approved for, can be a heartbreaking experience. So, get up early and look at neighborhoods, go on-line and search for home for sale, but make sure you know exactly what you can and are willing to spend. You don’t need a complete loan approval before you look, but you should speak with a loan officer from a reputable mortgage lending company before you start to search. The process will take you just a few minutes and you will get a good sense of how much you qualify to borrow, as well as how much you will need to repay each month for your chosen loan amount. By completing a quick “pre-approval” process, you can easily know that you are looking at homes in a price-range you can afford and are comfortable with, before you find that awesome house.
A quick word of caution here…
While loan officers can be an excellent source of information and are usually highly motivated to get you a loan, its important to remember two things. First, loan officers are NOT working for you – The loan officer’s responsibility is to the investor who is making you the loan. (So, if it comes down to a loan officer and an agent or broker with whom you have an agency relationship (they represent you), it is most likely that the advice that is in your best interest is coming from the agent or broker, not the loan officer.) Second, loan officers are sales people, not consultants as opposed to a good agent or broker. Agents and brokers, once you have entered into a representation agreement with them are advisors and consultants to you as the “client”. Your broker or agent are not salesmen/saleswomen. So, find a good agent or broker. Make sure you are completely comfortable with them, sign an exclusive representation agreement, then be completely open with them, and trust that they will do the right thing by you in the transaction. That kind of teamwork pays dividends in the transaction.
Great! You’ve found a loan officer who has given you a good idea of how much you can borrow. You have determined how much of that qualifying amount you are comfortable borrowing based on the payments and you know approximately what those payments are likely to be based on the current interest rates. Its time to go shopping!
Most people start their search for property where they research everything else, on the internet. You can use any of the available tools to search for listings. Its is very helpful to use a tool that will let you save search criteria, and portfolios of homes in which you are interested, alert you to new properties that are similar as they enter the market, as well as simply let you search for active home listings.
To many times buyers are so focused on the house hunt that they forget to start looking for an agent or broker they can trust, and feel comfortable with, early in the process. If you haven’t already identified your agent or broker, it is a good idea to shop for one as you are beginning to research listings.