When buying a home, don’t feel like you have to do everything on your own. Enlisting the help of qualified real estate and mortgage professionals can make the process go a whole lot smoother and help you find the home and financing program that works best for your needs.
So let’s talk about finding the right mortgage professional and the right real estate agent.
Working with a Mortgage Lender
Unless you’re planning on paying for your home purchase in cash, in full, you’re probably going to need a home loan. When you start searching for a mortgage, you should consider three key factors:
- Your Lender’s Credibility
- Your Lender’s Menu of Loan Option
- Your Lender’s Pricing
First let’s tackle the credibility issue.
These days people can find almost anything they want within seconds through an automated service or app. And while that may work for some, most people who aren’t mortgage experts–and that’s most people, period–will want a real human being they can contact when they have questions.
Most people also want to be able to trust that the mortgage loan officer they’re working with is a certified pro, knows the ins and outs of the loan process, and has high ethical standards. It can be helpful to look for a lender that is verified through the Mortgage Bankers Association (MBA) or another reputable trade group like the Mortgage Compliance Professionals Association of America, the American Bankers Association or the Credit Union National Association.
Now let’s talk about your lender’s programs.
Every person’s finances are different. Every person’s homeownership goals are different. Some people have a scenario that includes past credit mishaps, low cash reserves for a down payment, or non-traditional income. These scenarios may not match up well with your typical conventional mortgage. This is why it’s a good idea to work with a lender that offers a variety of mortgage products. Even if you do qualify for a traditional mortgage, you may discover that a different program offers more benefits or better pricing. It pays to have options.
If you’re a first time home buyer, you’ll probably want to find a lender who offers programs designed for new homeowners. For example, Luxury Mortgage offers a selection of home loan options that may be ideal for a first time buyer: FHA loans, Freddie Mac’s HomeReady program, Fannie Mae’s Home Possible program and conventional loans could all be possibilities to explore.
Finally, let’s discuss your lender’s pricing.
Notice this was not the first thing mentioned in the list of important factors, yet in the instant gratification-driven world of the Internet, pricing tends to be the first thing consumers consider. This can backfire when you discover that your lender who offered rock-bottom rates also offers rock-bottom customer service or misled you with a “teaser” rate.
One way to avoid the pricing trap is to read the fine print anytime you see an advertised interest rate. Make sure you understand what they’re really advertising. A 1.89% rate on a 3 Year ARM may sound appealing, but if you don’t know what an ARM is, you could be in for a shocking surprise. Another thing to look for is the APR (annual percentage rate of charge) rate. The APR is an annual rate that reflects not only the cost of your interest rate but also includes other costs associated with the loan. In other words, a mortgage may have an effective interest rate of 2.5% but once you include associated fees, the APR for that loan may be closer to 3%. Credit Karma has a great article explaining APR in more detail.
Here’s the bottom line: Obviously, the cost of a mortgage is going to be an important factor. Just don’t get swept away by “teaser” rates and low prices that seem too good to be true.
Finding the Right Real Estate Professional
Just like working with a trusted mortgage lender, partnering up with a great real estate agent can help you navigate the home buying process successfully. When looking for a real estate agent, here are three things we recommend considering:
- Your agent’s credibility
- Your agent’s communication skills
- Your agent’s experience
When it comes to an agent’s credibility, look for certain credentials. Are they part of any nationally recognized trade groups like the National Association of Realtors or The Real Estate Business Institute? Ask if you can have 2-3 references from previous clients. You can also scope out their digital presence to get a feel for their business style. Are they active on social media? Do they have testimonials posted on their website?
As for communication, make sure you’re working with someone who will be responsive and proactive. In most real estate deals, time is of the essence, so having an agent who is easy to get in touch with and who responds in a timely manner is essential.
When it comes to finding the right real estate agent, experience is always a plus. However, we also should stress that even new agents can do a fabulous job! So don’t automatically write someone off if they’re still a little green. In fact, new agents are usually very motivated and are hungry to close, so it’s not necessarily a drawback to work with a newbie.
That being said, if you are buying a home with some special circumstances or have a complex scenario when it comes to financing, working with a veteran real estate pro can have its advantages. For instance, if you’re looking at buying a foreclosure or a short sale, you may want to find someone who has had extensive experience in dealing with those types of properties. Likewise, if you’re taking advantage of a low or zero money down home loan, there may be certain restrictions on the location or on the type of property you can buy. This is when you may want to find an agent who is familiar with those unique loan programs.
Call us today: (888) 379-0303
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Stamford, CT 06901