It’s easy to skip right to the house hunting portion of buying a home before doing anything else. But talking to a real estate lender before will help you better understand which loans are available to you, and makes you more attractive to sellers and real estate agents. Here are 4 reasons to talk to a real estate lender before house hunting.
4 Reasons to Talk to a Real Estate Lender Before House Hunting
Many of us think we know the ballpark of our credit score, and our annual income, but knowing your exact position will place you in the right direction. There’s nothing worse than finding your dream home, only to realize it’s out of your budget. Additionally, getting an online quote isn’t the same as getting pre-approved. A pre-approval letter proves to both real estate agents and sellers exactly what you can afford, and helps you stand above the competition.
You can still shop around
Just because you get pre-approved from one lender, doesn’t mean you have to stick with that lender throughout the home buying process. You can collect quotes from multiple lenders, just be sure to do so in a tight timeframe since mortgage rates change every day. As long as you apply with several lenders within a two-week time frame, all the inquiries will count as one single inquiry on your credit report.
You’ll finish paperwork earlier
One of the top reasons to talk with a real estate lender before house hunting is that you’ll finish the paper work earlier. Buying a home requires a lot of documentation from tax returns, pay stubs, W-2, and bank statements. Starting the document collection process earlier will make it easier when it’s time to finalize your loan. It also reduces the likelihood that the seller pulls out of the deal because of mortgage complications. The easier you can make the home buying process, the better!
It’s helps budgeting for closing costs
There are instances where buyers are completely shocked by closing costs and do not budget according. By talking with a real estate lender before house hunting, you can better understand what you’ll pay at closing. Additionally, you can gauge a realistic total for closing costs on top of your down payment. The lender will give you an idea of how much origination fees, title fees, and appraisal fees will cost. This will help you budget correctly and avoid the shock on your closing day.
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