Buying a home can be a confusing process, and knowing where to start can be even more confusing. There is the real estate side of the transaction that includes you and your real estate agent, a purchase contract offer, maybe a counteroffer, acceptance of an offer, maybe a denial of an offer, and that’s just the beginning. On the mortgage side, you have the loan application, perhaps some credit work, disclosures, underwriting, and a few more steps thrown in for good measure. Both sides of the transaction also have their own sets of vocabulary.
If you’ve ever attended an open house, you know there is a real estate agent there hoping to help you purchase your next home, so it would make sense to think that you should start with an agent. That would be the wrong answer. While the real estate agent may be your first point of contact, a mortgage loan officer should be the starting point of your home purchase. The agent at the open house will gladly help you find your dream home, and a good agent is going to refer you to one or more of their preferred lenders if you don’t already have your own.
Why? You might ask. Mainly, so you know what price range you can shop in. By speaking with a lender, submitting documentation, and getting pre-approved, you and your real estate agent can go out house shopping in confidence. Your lender and your agent will work together in getting you the home you want at the best deal possible with the best loan possible.
Starting with a mortgage lender is also a good idea because you may have a surprise on your credit that you need to fix before you qualify for a loan, or you may be able to get a better rate just by raising your score a few points. A good mortgage loan officer will be able to help you figure out how to increase your credit score, without performing credit repair or being a credit repair specialist.