Nowadays, you can find almost anything on line. It is hard to beat the convenience and ease of shopping at the push of a button. In most cases, if you do not like what you have bought or if it does not fit, you can simply return it. That may work well when you are purchasing a new pair of pants or shoes, but how about a home?
A home purchase is likely the single largest investment a person will make in their lifetime. While the number of “online only” mortgage companies has continued to grow in recent years, do they provide the best home financing solution for you?
Financing a home is about finding the right mortgage product for you among the many options. It is also about building a trusted relationship with your lender and developing a home financing plan.
Online only mortgage companies often include slick marketing and promises of speed, but they can lack expertise, the lowest rates, and a good understanding of the local housing market. That is why working with a reputable, seasoned, and smart local lender is essential. This becomes even more important if your situation or the property you are considering involves complications or competition. Keep in mind that good local lenders act as hybrids with a web presence and time saving online applications to help expedite and simplify their custom service.
Do not rush into the process of home buying, especially if you are a first time buyer. Take time to reflect and ask yourself some important questions:
- What is your budget and down payment plan?
- What type of home are you considering (single family, condominium, or multi-family)?
- What towns are you considering?
- How long do you expect to stay in the home?
- What are your long-term financial goals, including further education, family, and retirement?
- Do you expect your income or expenses to change in the future?
- Is a second home or renting out your current home a possibility when you buy up in the future?
- Do you know what options you have and the pros and cons of such options?
Have a budget in mind. Remember that mortgage affordability and loan approval limits can be very different. Compare your monthly net income to your total monthly expenses and saving goals. What is the maximum amount that you want to spend toward a housing payment each month? Have you factored in the cash needed to close plus the cost of renovations, furnishings, insurance, and emergency reserves? A good lender can help with strategies to secure the cash needed to purchase.
Before you go house shopping, you should have a discussion with your loan officer about what type of loan (fixed rate, adjustable rate, conventional, first time buyer, or government backed loan, etc.) is right for you. Review your goals, thoughts, and questions to confirm that you have factored in all personal concerns and expected future financial plans.
Know your credit score. It is one of the factors affecting your approval for a loan, and it affects the rate you will receive. A good loan officer should be able to offer suggestions on how to raise your credit score to help put you in the best possible position when you are ready to buy.
Select a reputable local lender with whom you can talk easily and clearly communicate. Choose to work with someone who has wide access to various loan products. All lenders should be able to provide you with a written pre-approval letter. Once you have found your dream home, your lender will submit your loan application and lock your rate when the time is right. A good local lender will meet with you personally or over the phone to walk you through the process and any potential loan changes, confirm the loan product, find you the best rate, and help you provide the documentation in a timely manner to prove your income, assets, and debts.
What sets reputable loan officers apart is their ability to see your home purchase as part of your overall financial plan, and to help you customize a home purchase plan to best suit your individual needs and situation. An exceptional loan officer will help you plan and strategize, to tailor your mortgage to you. It is not only about securing “a mortgage” or a “30-year fixed,” but also about developing a sound home financing plan that is in keeping with your overall financial goals.
A trusted local mortgage banker can help you buy or refinance today, and also help you keep your goals on track for the future while providing consistent communication, value, and service over time that an “online only” mortgage company cannot match. The most important things in life require thoughtful planning and the best fit possible…your mortgage financing is one of them.
Schwartz & Schwartz, P.C. highly recommends Bob Cahill, Senior Mortgage Banker, Broker & Planner, of Leader Bank. Reach out to Bob at (781) 589-8756 or by email at email@example.com to discuss your home financing options. All consultations are free and without obligation.