In working with several buyers recently, some of them first time buyers, the value of a basic piece of homebuying advice keeps proving itself. That advice is for buyers to put as one of their first steps the need to talk to one or more lenders in order to find out how they stand in the market.
The lending landscape is changing frequently. Some changes will keep buyers out of the market, but many are being made that help buyers, especially first time buyers. I include news of some of these changes in this blog from time to time, but there’s nothing I can tell you here that will take the place of a 20-30 minute phone conversation with a lender. That conversation will include questions about your income, the bills you owe, your credit history, and other factors that lenders take into account to determine what types of plans they can offer you and what
the limits are of these loans. In talking to my lender friends, they say that new information and changes in the lending standards of various sources of mortgage money mean that you need to develop a relationship with a lender who understands your needs and can keep you up-to-date on changes as they occur and in terms of how they effect your buying plans.
Many buyers like the idea of getting a great deal on a bank-owned (foreclosed) property. There are some great deals out there (although it doesn’t have to be bank-owned to turn into a great deal). Most of the bank owned properties require that an offer must be accompanied by a buyer pre-approval letter. So, you need to start your home search with a pre-approval in-hand. Some individual homeowners also require this, especially if they previously had gone under contract and had the transaction fall through because of buyer financing problems. They don’t want to take their home off the maket” for a contract that doesn’t include some up-front assurance of the buyer’s ability to close the deal.
So, talk to one, two or three lenders to find out what types of loans you’d be able to get, and to find out who you would feel comfortable working with. I assure you that this will be important down the road when you have an offer in place, and you’re depending on the lender to work up the loan package and deliver the funds by closing day.
