Talk to a Lender

No matter how confident you are of your spending ability, if you will need to secure a loan to buy a house, Step 1 is always to talk to a lender.

There are several ways to find a lender, and we recommend talking to at least two in order to be able to compare rates and fees. A good place to start is with a lender recommended by a past client or Realtor. It is also good to speak with your bank if you have a good history with them.

Choose a lender that communicates well and makes the process less confusing. A good lender is responsive and easy to reach. Ask the loan officer if he or she attends closings. Another good question to ask is how long it takes for a loan to go from application to "clear to close".

Do not be afraid to ask questions when it comes to choosing what type of loans are available.

A fixed rate loan means your interest rate will not change over the life of the loan. An adjustable rate mortgage will mean changes in your payment (most likely upwards!) that could affect your ability to affort the home when the rate adjusts.

After you have completed your loan application you will receive a pre-approval letter. This letter is important because we will include it in your offer to a seller to purchase a home. A seller that sees a pre-approval letter knows that the buyer is serious and capable of purchasing the home.

Be sure to review your Good Faith Estimate provided by the lender in great detail.

If you need help, we will be happy to go over this document with you. This is the best estimate of what to expect in terms of money you will need to have in order to buy the house. Most buyers pay prepaids (taxes and insurance held in advance by the lender) and closing costs (loan origination fees, mortgage company fees, and costs for appraisal, title company fees, and survey.) If you need help from the seller for paying closing costs, this will help us know how much to ask them for as a part of the sale.

The Good Faith Estimate will also show you what your monthly payment will be like. A monthly payment consists of Principal, Interest, Taxes, and Insurance. We will check that the property taxes are correctly estimated - always plan on what the purchase price of the house is multiplied by the tax rate... not the current assessed value, because if the property is underassessed (say just the value of the lot because it is new construction) you do not want an unpleasant surprise when your taxes go up.

Once you know what to expect financially, you are ready to move on to the fun part, finding the right home!