Reasons to speak to a mortgage lender as soon as possible

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Most people begin their home buying journey once they have saved enough money for a down payment. The rest of the process usually involves talking to a lender, getting pre-approved for a home loan, working with a real estate agent to find a place that’s right for you, making an offer, doing inspections, and possibly to close the property.

According to Nicole Rueth, senior vice president of the Fairway Independent Mortgage Corporation, potential buyers should start talking to lenders long before they’re ready to buy a home instead of waiting until they have enough money to put down a down payment. .

“The moment you’re thinking about buying a home is when you should be talking to a lender,” says Rueth. “You don’t have to be buying a house already to do that. You can be two years away from buying a house and still start this conversation.”

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By having this conversation early on – even if you’re still a few years away from buying a home – you’ll be able to get your lender’s advice on what you need to do over the next few years to afford the kind of house you want to buy.

“Perhaps you find that you will need a better paying job to pay for the house, or perhaps you are told that you need to strive to pay more of your debts or fight a negative business line on your credit report,” Rueth explains. “This will be the homework you need to work on after meeting with a lender.”

Working with a lender up front can also provide a clearer picture of what else you’ll need to budget for – after all, a down payment is just one of many upfront costs you’ll need to be prepared to pay when you’re on the move. re finally ready to buy a house. For example, you’ll need to consider lender fees – fees associated with processing, approving and funding your loan, which can be 1-2% of your loan amount – as well as additional fees for appraisal, inspection and title. Insurance.

How to find a mortgage lender

Rueth recommends starting with people and institutions you trust when trying to find a lender.

“I would check with people you trust. Don’t just ask your friends who they got their mortgage from, ask your financially savvy friends who they went with,” Rueth says. “You want to take advice from the right people.”

Your favorite local bank is another good place to start a conversation with the owner. Rueth suggests working with a lender who already provides resources to educate and inform potential borrowers about the home buying process, which shows they believe in spending time educating others.

A quick search on a mortgage lender’s website can help you find out what types of educational resources are available. Chase Bank has a great podcast series called “Beginner to Buyer” which aims to help customers get to grips with the home buying process, while PNC Bank has an online first-time buyer’s guide, which includes the access to an online affordability calculator.

You can also research on your own using websites that cover mortgage lenders. Select has gathered and ranked the best mortgage providers for a number of situations, including the best mortgages for those who want to put down a small down payment on the best mortgages for those with low credit.

“A good lender will spend time with you even if you’re not ready to buy a house today,” says Rueth. “Today’s conversation will better position you to achieve that homeownership goal.”

hunting bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, DreaMaker℠ Loans, and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a DreaMaker℠ loan

NCP Bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, USDA Loans, Jumbo Loans, HELOCs, Community Loan, and Medical Professional Loan

  • Terms

  • Credit needed

  • Minimum deposit

    0% if you continue with a USDA loan

At the end of the line

Even if you’re a few years away from being ready to buy a home, it can still be beneficial to sit down with a lender and discuss it. The conversation can help you figure out what the next 12-24 months should look like in terms of financial readiness to buy a home.

“Anyone who doesn’t think they can afford a home right now needs to find their way to homeownership,” Rueth says. “It’s never a ‘no’, but it can just be a ‘no for now’.” In other words, early conversations with a lender can help you bridge the gap between “not yet” and owning a home.

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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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