Once you decide owning is your goal, whether it is your first home or an investment property, then it’s time to put your dream team in place.
Last month we talked about Step One: Choosing a realtor. Now we will talk about Step Two: Choosing a lender.
Going to your Realtor for suggestions on lenders is the best place to start. After all, the company will be working as a team on your behalf. So you want team members who know each other, maybe have strategized together before and definitely have been successful in making other peoples’ goals become realities.
Your Realtor is your best source for finding an ethical, competent lender that they know can close a deal in a timely manner.
Trust is vital and should be where you relationship starts; find someone you trust and stick with them.
If you would like to speak with more than one lender before making your decision, by all means do that. Most Realtors can give you the names of a few professionals they are confident in and have done business with.
If you have a long-standing relationship with your bank, wonderful! Check with them. However they will usually only offer their own products, so it is still a good idea to check with other lenders to see what they can offer.
The most appropriate time to decide who you will use is before you look at properties. Looking at homes is closer to the end of the process than you think. If you fall prey to indecision on your lender choice while you are writing offers, then your transactions are less likely to succeed.
Time frames in a purchase transaction are quick, so a switch after you have an accepted offer is like playing with one team member sitting out for over half the game. You are less likely to meet your transaction time frames and could be at risk of losing the property.
Again, before you look at homes and write an offer, choose your lender.
Ask them tons of questions. With each lender, make sure to ask: What you need to do to be ready to buy down the road? What do you currently qualify for? What different financing options are available? Which option is best to match your goals and why?
An important point: Make sure the lender explains what the different fees are for your suggested options … and in detail. It is also a good idea to take home the printout of a few scenarios so you can digest the information, consult with someone you trust or see if additional questions come up later.
My closing tip: Don’t choose your lender solely based on an interest rate. This is an important question when qualifying your new “dream team” member and should be a part of the decision, but not the entire deciding factor. I have seen people who were blinded by the short-term “wow” of the initial rate quoted. They moved forward and found themselves in the wrong loan for their situation. While the lender can give you a great rate initially, it can still be a bad loan for you and end up costing you more in the long run.
Realtor Bo Bortner offers his sound advice and personal knowledge of the industry as a successful agent with Team Metro Real Estate. He can be reached at (619) 840-2981 or online at www.bobortner.com.