“I want to see a house. Why would I call a lender to do that?” Great Question!!
Your first step when you’re serious about buying a home is to call a REALTOR. However, the next step is not necessarily to look at homes. Unless you’re paying cash, there is some preparing to do. Once you’ve hired a REALTOR, trust them. They work for you and your best interest are put above their own (by law).
When you find a home, you’ll want to be an attractive buyer with leverage for negotiating. A seller wants to know that a potential buyer can perform. Let’s say a seller receives two offers on the property and the financing is solid on one but unknown on the other. Often, the seller takes the offer with solid financing even if it is lower. Essentially, the seller is paying for peace of mind. So, if you present an offer without solid financing to go with it, you may be leaving money ‘on the table’.
Another benefit for you is that if you’ve spoken with a lender you not only know what you can afford but how much you’re comfortable spending. The lender will help you estimate what a payment would be at different sales prices. There is no good rule of thumb for this. Too many variables. How much are you putting down? What interest rate do you qualify for? Will the closing costs be rolled in? How much are taxes? Insurance? Homeowner’s dues? Etc.
You may assume from all that dependable information on the internet that you can spend $250,000 to find out that you really are much more comfortable at $225,000. That leads to a few problems for you. Once you see a $250,000 home, you will never be excited about a $225,000 home. What if you enter into a contract for the more expensive home and then find out you aren’t comfortable with the payment. How do you get out of it? You could lose your earnest money and costs of any inspections. Or, worst case scenario, the seller could sue you for specific performance.
Don’t let this happen to you. Follow the tried and true steps to homeownership.
1) Choose an experienced REALTOR that you trust and let them do their job.
2) Choose an experienced lender with a proven record in today’s market. (Your REALTOR can help with this.)
3) Find your dreamhome.
Enjoy!!!
leighyork 