Guest Blogger #537, Entry #1210, May 22, 2012
Buying your first home is certainly exciting, but because you have no experience with the process, it can also come with a steep learning curve that makes it more than a little hazardous, not to mention harrowing. A home is a major purchase, so you want to make sure that you get the best possible deal, and this means you will have to do some amount of digging to unearth the right lender. For this reason, there are several things to consider before you sign on the dotted line and commit yourself to a long-term mortgage relationship. Here are just a few tips to help you get started.
Image via: Maria Miller Hanson
Trusted referrals are the absolute best way to begin your home-buying journey, so ask family, friends, and colleagues if they can offer you the name of a reputable, reliable, and helpful lender (many will no doubt share stories of bad experiences, as well). And don’t overlook your realtor as a resource in this capacity. It is illegal for them to take kick-backs for referrals, so you can pretty much bet that their recommendations are based on past personal experiences of the positive variety (so long as they refer you to more than just their in-house mortgage lender).
Approach several lenders.
You wouldn’t purchase a car without looking to see if one dealer has better prices than another, so why would you settle for the first lender that approves you? It can be tempting to stick with the banking institution or credit union that you’re familiar with, but they may not provide you with the best deal (or approve you at all). Comparison shopping is what makes a consumer society tick, so don’t hesitate to take advantage of the fact that you have many options to consider.
Broker versus lender.
There are some advantages to going with a brokers, mainly the fact that they can shop around your application to several lenders at once in order to save you the time and effort of doing it yourself. Unfortunately, this service comes with an additional price tag (brokers have fees in addition to what you’ll pay the actual lender). And in all honesty you might be able to broker a better deal on your own or gain access to special offers that lenders will extend to individual buyers, but not brokers. So the toss-up is really time or money.
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When choosing a lender, one of the most important things to look for is someone who will answer all of your questions without giving you the runaround. You are spending a fair chunk of change and you need to know that you’re working with a lender that isn’t going to bombard you with hidden fees or try to talk you into an arrangement that isn’t in your best interest. If you can’t get a call-back or the lender seems annoyed with your questions, look elsewhere.
Get comfortable with your representative.
If you find a lending institution that you like but the representative you’re seeing is awful, ask to work with someone else. It is essential that you trust the person who is helping you with your loan if you want to feel good about closing the deal. Plus, if you need to come back to deal with any issues down the line, or should you want to refinance at a later date, you’ll be happy that you have a trusted advocate helping you out.
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