Home Buying Process November 10, 2020

Financing Your Home: Working with a Lender

Getting started in the home buying process can be exciting and frustrating at the same time. If it’s your first time buying a home, you may not be sure where to start! Don’t worry, though, we are going to explain everything about the home buying process, step by step. You can find all of the articles here, on our Navigating the Home Buying Process page

The home buying process has been streamlined in many ways, but obtaining financing and going through the mortgage application and approval process remains a paperwork heavy exercise. There is now some automation, but the human touch remains. Having an open line of communication with your lender is important, as is understanding the process and what you’ll need to do.

What Should I Do First?

First rule of thumb: get all of your questions answered from the start. What are your options: what loan programs are available to you?  What are the pros and cons of each?  Which is the best fit for your financial situation and goals? How much down payment will you need?

Choose Your Lender and Apply for a Loan

Speak with a few different lenders to get a feel for who will be a match for your financing needs and your communication style. When you find one that is a good fit, you will fill out the loan application, probably online. Your lender will then give you a solid pre-qualification letter that lets you know how much you qualify for. You will then likely share that letter with your real estate agent. When you find the home you want to buy, your agent will submit the letter with your offer to purchase a property to show the seller that you are qualified to purchase the home.

What Happens While We Are Under Contract?

Once you’ve started the paperwork part of the process, take a deep breath and remember to be patient. Even if you feel totally prepared, you may still field unexpected requests for information. Some paperwork is redundant and may be required again. <wink>  Your lender won’t ask unless they definitely need it! You should also be timely with your responses to requests for information, as you will be under contractual deadlines and your lender will be working to meet that timeline.

Your real estate agent will be in touch with your lender to help manage through the transaction. While they won’t necessarily know your financial details, they will help ensure that the lender has the property specific information that’s needed, and will help make sure that contractual deadlines are met.

Here’s What NOT To Do:

These are a few things your lender will tell you to avoid while you are in the process of buying a home:

  • Don’t make major purchases.
  • Don’t charge up your credit cards
  • Don’t leave your job
  • Don’t take a personal loan or any gift money without talking to your lender first about the proper way to document and receive it.
  • Don’t apply for a car loan

Looking for a place to get started? Contact us and we can make some recommendations for who to talk to. Also, you can find lots of information on the mortgage process here.