3rd Step for a First Time Home Buyer
In our previous blogs, we have discussed the first 2 steps in the home buying process when you are a first time home buyer. Step 1 is to select a really good realtor. And Step 2 is to get Pre-qualified with a lender.
Step 3 is done in concert with Step 2 and that is to find a good lender.
Not All Lenders are created equal
Lenders are like real estate agents in many ways. There are hundreds of them out there but that doesn't mean that they are all created equal. Most first time buyers will get hung up on “what kind of rate can the lender give me.” And while that is important, there is a lot more to the story.
For example, in a competitive market, like we are in currently here in Hampton Roads, a good listing agent (which is the agent that represents the seller) will take into consideration who the lender is that the buyer is using. AND there are certain lenders that historically have been slower than others in getting loans closed. At the end of the day, that is the aspect or factor that is most important to a seller and ultimately, a buyer. Can the lender get the loan closed and in a timely fashion?
Buyers should use a local lender
Another factor to consider when buying a home is that a buyer is going to want to use a local lender. There are a few lenders with instant name brand recognition and who tout fantastic interest rates. BUT they are based several states away. My experience has been that at some point in the home buying process, there will be times where you will need answers to problems in a time sensitive manner. However, if the buyer is dealing with a loan officer who is not local, I have found it can be challenging for a loan to get closed within the normal 30 day window.
To this point, my team likes to recommend using OVM Financial. While you are free to use whichever lender you’re most comfortable with, we have found them to be trustworthy, knowledgeable and readily available. In fact, there have been many times when I or someone on my team has had a question after business hours and the folks at OVM have given us their mobile numbers (not sure if they are still happy about that! Just kidding) and we are able to get our clients the answers they need in a very efficient manner. I tell my first time home buyers and other clients that I have OVM on the “Bat Phone.” :)
The other thing that I tell my first time home buyers is that we always want to control as much of the situation as possible and not let the situation control us. There are many pitfalls and obstacles that can come up for even the most seasoned of buyers. 9 times out of 10, those obstacles have to deal with the loan. So why would we want to jeopardize the ability of the buyer to close on their home simply because the out of town lender quoted them what seems to be a good interest rate?
Speaking of good interest rates, the other thing is this; once you pull the curtain back on the interest rate that is being proposed, there are usually some fees and other settlement expenses that have probably not been factored into the initial quoted rate. This is why I always encourage my clients and first time home buyers to shop around AND to make sure you are comparing apples to apples. The good folks at OVM will take the time to walk through the proposed rate and go over the ins and outs of the loan to make sure that the buyer fully understands what is being offered.
Well that wraps it up for this week. Please be on the lookout for our next blog as we continue to go through the home buying process.