You’ve found it! That perfect mid-century ranch with a porch and less than a 15-minute commute to work! (Or maybe this house only exists in your head, but your certain you’ll find it soon) Good job. Give yourself (and your real estate agent) a pat on the back.
Now unless you have many hundreds of thousands of cash burning a hole in your pocket, you’re going to need a mortgage. Where to start? Here’s a quick run-down of some things to keep in mind when jumping into the deep-end of the mortgage pool.
Talk with your real estate agent.
Despite the rise in internet-driven lead-generation and constant TV reminders from Quicken, real estate agents remain the most popular way to source your mortgage.
The reason is simple – by the time you’re ready to get serious about your mortgage, your real estate agent is the person most familiar with your house hunting journey; they know your desires, timelines, and countless other details that could drive your mortgage experience. More importantly, they likely know about your financial situation which should drive a major part of your decision when choosing a lender.
When shopping around for a mortgage, it’s best to start off with your real estate agent’s personal recommendations. And in case you’re wondering, the answer is no – they don’t get any kickbacks from lenders. That’s always been illegal.
Have an idea of what mortgage product you want
FHAs and VAs, and jumbos oh my! What does it all mean? While we don’t have the time to go through every type of loan, you can read a good starter guide here.
But we do suggest that you take 1-2 hours one night to go over some internet literature and talk with some people who have already gone through the house-buying process. They will be able to take you their decision-making process and hopefully guide you away from some pitfalls that others have gotten into.
Which brings us to our final point:
Know your situation, and shop accordingly
Are you self-employed? (Better get your documents in order.) Are you a military veteran?(We’re jealous.) Do you love paying off loans early to save on interest?
If you don’t know the answer to the questions above, don’t worry, but do give them a hard think. There are different mortgage products and different offices serve different clients and different needs in vastly different manners. Having a rock-solid idea of your home-ownership and financial goals will help you slice through the noise and find the right mortgage lender for you.
At the end of the day, keep in mind that this is likely the biggest purchase you’ve made in your life up until this point. Make sure you have a loan officer and a loan office that respects the time and effort that you’re putting into this journey.