When owning property becomes a feasible event in a long-time renter's life, typically the #1 thing that'll increase drastically is their time spent on Zillow.
Between adjusting those filters to ensure you've got the optimal criteria, to checking the app the second you wake up in case the perfect home appeared on the market overnight... Zillow becomes a big part of your life.
And as soon as you start hitting that 'Schedule A Tour' button, you know things might about to change drastically; you might find 'The One'.
Here's the thing... you might assume the first part of house hunting is going on Zillow, finding a home, and then touring it... but actually that's putting the cart before the horse — because there's a very important step before you start doing that:
🧳 Talking To A Mortgage Lender 🦸♂️
Many homebuyers think it’s jumping the gun by talking to a lender too soon. You might think that step comes after you've toured properties and found the home of their dreams. When, actually, if you wait to talk to a lender until after you've found 'The One', you're probably too late (at least in this competitive South Jersey sellers market).
Here are three reasons why chatting with a lender should be #1 on your to-do list (before you even think about hitting the househunting trail):
1. Learning About Various Types Of Mortgages
Knowledge is power when buying a house. Sure, you can Google your heart out about home loans, but it's the things you can't find online, things that only a trusted, hyperlocal mortgage lender can educate you on, that can make all the difference between you getting the home you want, versus getting your offer rejected.
We specifically state "hyperlocal lender" above because this is important; you can obtain a mortgage through some banks, or via online 'big box store' lenders like Quicken Loans and Rocket Mortgage. Our expert opinion? That would be a mistake.
A local, independent mortgage lender will usually always understand the intricacies of your exact housing market far more than a huge national brand ever will. This is super important when it comes to getting an appraisal, for example.
They’re also more likely to pick up the phone and help you at 6pm on a Friday evening when the home of your dreams has just hit the market and you’re desperate to get pre-approval in order to put in an offer!
There's many different types of mortgage products, and you need someone aware of your local housing market to guide you through the process, and what may be the most cost-effective route for you. There’s also many first time home buyer grants and programs they’ll be able to help you apply for. And it's for this reason that makes it important to contact a lender first before you start your home search.
2. Getting Your Financial Ducks In A Row
A trusted, local mortgage lender doesn’t just look at your income and tell you which loan to apply for. They actually look at ALL your debt source, income sources, your debt-to-income (DTI) ratio, your credit report, and many other things.
A good lender will be able to make suggestions to you to help you get your credit score down, and this could get you a better interest rate.
If you have a less-than-amazing DTI, they’ll be able to help you strategize on which debts to consolidate and which debts to pay off first. Being smart about your debt could lead to a better DTI, which means you’re more likely to be accepted for the home of your dreams!
Speaking to a lender long before you start touring homes gives you a headstart so you can make the necessary improvements to repair your credit, pay your debts, or save up for a down payment. The earlier you start, the better.
Not only that, there are several upfront costs you'll need to prepare for when you’re buying a home alongside your downpayment. Working with a lender can give you a clearer idea of what else you’ll need to budget for and how much they’ll cost, including lender fees, title, insurance, appraisal gaps, inspections, and other closing costs.
3. Setting Realistic Expectations To Streamline The Home Search
Oh, the heartbreak of falling head over heels for a home, only to have your wallet deliver a reality check. Don't let this tragic tale happen to you!
There’s not much worse than finding the home of your dreams only to find out no lender will give you the money for it… not only that but you’ve wasted your time AND your agent's time looking at homes out of your budget. You can easily solve this problem: by speaking to a mortgage lender first.
A quality real estate agent won’t let you start looking at homes without speaking to a lender first anyway… but in case they forget to mention this step, it’s important you know. Lenders are like financial wizards who can pull back the curtain and reveal your true purchasing power, factoring in everything from current interest rates to your downpayment stash.
By speaking to a lender and getting your pre-approval, you can dodge the time, energy, and cash-draining trap of ogling homes way out of your budget.
This little bit of advance preparation can go a long way to save you from househunting heartbreak 💔
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