Buying a house is an exciting process, but if you aren’t properly informed it can turn into a nightmare. Deals fall apart for things that could have been avoided. I don’t want these things to happen to you, thus the point of this blog post. First, I’d like to point out that a lender and a loan officer are the same thing. A loan officer and a mortgage lender are very similar but that’s another post all together.
There are probably just as many loan officers as there are real estate agents. Having a reliable lender that is knowledgeable and understands deadlines is important. Hold them to the same standards as you would your realtor. This is really a group effort. Along with escrow and title, the transaction can not close without a loan officer.
The process to getting a loan is kind of complicated so I’m just going to give you the basic outline to help you navigate through what you’ll experience. If you’re reading this, chances are you are thinking or have already decided to buy a house. Great! You might even have a general idea of what you can afford, but before you go shopping you should talk to a lender.
A lender will help save you from unnecessary heartache. Finding the house of your dreams is only fun if you can afford it. Your real estate agent will most likely have a loan writer or two that they work with that they can recommend to you. You can either go into their office or you can talk to the lender over the phone. This is the part where things start to get really personal and not everyone feels comfortable with this. Just remember, lenders help get you money so they’re our friends. The first conversation should be brief; Anywhere from 15 to 45 minutes normally. The loan writer will asks you questions about your income, your debts, and expenses. They will enter this information into the computer and based off what you tell them, you will be pre-qualified or not. If so, not lender emails a pre-qualification letter to you and your agent. You now know how much of a house you can afford, what your closing costs are, and what kind of financing you qualify for.
At this point, you could go shopping for a house. I’d recommend taking it a little further and getting pre-approved first. To be pre-approved, you have to prove all of the information you gave the lender is accurate and true. Pay stubs, bank statements, alimony; They want it all! This step can cause some buyers stress. There’s a lot of paperwork involved but once you get it all turned in to the lender, they turn around and give it to the underwriter. This is the person who is allowed to hand out money. The underwriter determines the accuracy of all of the documents and once they decide it’s all good, they send you a pre-approved letter.
A pre-approved letter is as good as cash. A seller will sooner accept an offer from a buyer who has been pre-approved, as oppose to a buyer who has been pre-qualified. Getting pre-approved right away makes the whole process a lot quicker.
I hope this information cleared up any confusion on what happens when your realtor tells you to talk to a lender. Which you should talk to a lender whenever you have any questions relating to loans and mortgages. In my last blog, I briefly explained the difference between the four basic loans buyers typically receive. Feel free to check it out if you’re interested in the crash course. As always, feel free to contact me with any realtor you questions you may have.