Anaheim, Ca First Time Home Buyer: Part 2- How to Choose your Lender

Anaheim, Ca First Time Home Buyer: Part 2- How to Choose your Lender

When it comes to buying your first home, there are many choices you have to make. Making the right choice can mean the difference between a happy first time home buyer and disappointment. Chosing your lender and loan officer is a very important decision you do not want to go wrong on.

First Time Home Buyertip 1: First things first, secure financing. Oh I know talking about finances is no where as much fun as going to look at homes but it needs to be the first thing you do. Sure you can start by choosing your agent as they can be a great resource in finding your lender, but before you start looking at homes you need to know what you qualify for.

First Time Home Buyertip 2: Chose your lender and loan officer wisely. I am guilty of this myself, but I quickly learned so learn from my mistakes and don't make these mistakes yourself. As a Realtor in today's market it goes without saying that a buyer should be approved for a loan before starting their home search. What I was doing is recommending that my buyer's walk into their local Bank of America, Wells Fargo, or Chase and get pre approved first. This way I know how much they qualify for and I would have an approval letter ready for when it was time to make offers. Sounds like I did all I had to do, right? Wrong. Lenders are handing out approval letters like candy. What they do not hand out like candy is loans. Remember, just because a loan officer works for a big bank doesn't mean they are qualified to do your loan. I learned that lesson the hard way.

First Time Home Buyertip 3: Get referrals when it comes to choosing a loan officer: If you have already chosen your real estate agent, they can be a great source for a loan officer referral. After all besides yourself, your agent is the 2nd most dedicated to getting your home purchase closed. If you have not chosen an agent or if they do not have a referral for you, inquire with friends and family. If someone you know has purchased a home recently, inquire about their experience with their loan officer. If they were satisfied, give that loan officer a call and see if you would feel comfortable with them as well.

First Time Home Buyer tip 4: Do not rule out mortgage brokers. Because many direct lenders have systems in place, loan officers who work for these banks often have less control over their files than a mortgage broker has. It is sometimes a misconception that brokers charge more than a direct lender. Because a broker can shop rates, the extra cost to use a broker can often be absorbed by the lower rate they are able to secure for you.

First Time Home Buyer tip 5: Use a full time loan officer. Same as a Realtor, doing home loans is a full time job. You want your loan officer to be available for you and dedicated to getting your loan done in a timely manner.

First Time Home Buyer tip 6: Ask the right questions. When interviewing a loan officer for the job of securing you a home loan make sure to ask questions about their experience and qualifications. If you are doing an FHA loan for instance, ask if they can process these type of loans and how many FHA loans they have done. Ask them how long they have been in business. Do they do loans full time? What are their office hours? What is the average time it takes them to close a home loan? This last one is important as many sellers now charge fees for late closings and can even cancel the sale if you are not able to close in a timely manner.

First Time Home Buyertip 7: Bring in a full package when being pre approved for a loan. This is probably the most important. Yes it is extra work but get it done. Bring in all pay stubs for the last month, last two month bank statements, last two years w2 and tax returns, a copy of drivers license and social security card, and get your credit ran. You want to make sure your loan officer examines everything upfront. If all your loan officer asks for is a recent pay stub and a credit report, run. The last thing you want is a preapproval letter that doesn't really mean you can get a home loan. Some loan officers are guilty of taking any prospect and seeing what sticks. You do not want a loan officer who practices this way. You want to be certain you qualify. Ask your loan officer if she sees any potential problems. If your loan officer spots potential problems that can be addressed, get these items fixed now rather than wait until you are in escrow on a home.

First Time Home Buyertip 8: Get payment and cost estimates. Interest rates fluctuate but this should not stop your loan officer from giving you an estimate based on today's rates. For one, you need to know how much money you will need to buy a home. Also, when you get pre approved your loan officer will let you know how much home you qualify to purchase but payment is also a factor. Let's say, for instance, you are pre qualified for $300,000 but you feel comfortable with a $2000 a month payment. Your loan officer can go over different scenarios with you so you have a better idea about roughly how much home you can buy and still stay within a payment you feel comfortable with. Now remember to give this information to your Realtor so she can adjust your home search accordingly.

Next time I will go over Anaheim, Ca, First Time Home Buyer: Part 3 Do and Don't. Many times First Time Home Buyers are not properly informed on what they should and what they should not do as they search for their first home and during escrow after they find their home. A wrong decision can mean a failed transaction... next blog will go over everything you need to know on this topic...

Click here to read First Time Home Buyer: How to Choose A Real Estate Agent

Click here to read First Time Home Buyer- Part 3: Buyers Do and Don't