First-Time Home Buyer Tips for Working with a Lender

We often hear from First-Time Home Buyers that they are waiting to "clear up" their credit before making an appointment to meet with their lender. We always suggest they see their lender right away and let the lender provide guidance and assistance addressing any credit issues that may appear.

So, what should you expect when working with a Lender? Here are a few things to expect:

• Choose a Lender with a reputation you are comfortable with.  These days, it doesn't make sense to work with a second rate lender.  Lending programs are such that you should be working with a reputable lender who has the expertise to stay on top of the rapidly changing lending requirements.
• Start by arranging time to get pre-qualified.  Many lenders can pre-qualify you over the phone in as little as 20-30 minutes.  Also, many lenders will allow you to apply on-line.  If you do apply on-line, we suggest you choose a loan officer and contact them over the phone prior to submitting your application to insure you have a comfort level with the particular loan officer. 
• Being Pre-Qualified will give you an accurate picture of how much loan you can qualify for.  Be sure to work with your lender to determine how your planned life changes will factor into the amount you are comfortable affording.
• Your Lender will discuss you credit score with you.  The lender will work with you to find the best lending program that fits your housing needs and also works with your credit results.  When making an offer, we as your Realtors, will work with your lender to write an offer that protects you based on your expected loan program.
• You will need approximately 20-45 financing days to close.  Once again, we will work with your lender to write an offer allowing adequate time to complete your financing requirements.
• Stay in close contact with your lender throughout the process.  Do not make any changes to your credit without speaking to you lender.  Even after your final pre-approval, don't make any changes.  YOUR LENDER CAN AND LIKELY WILL PULL YOUR CREDIT UP TO THE DAY OF CLOSE.

Here are a few terms you will hear when talking with a Lender

• Pre-Qualified:  This means a lender has reviewed your financial situation and has determined the amount they would be willing to lend you for a mortgage.  Further documentation will be required to validate the assumptions used to pre-qualify.
• Pre-Approved:  Once you have located a house within the price range you are pre-qualified for, the lender will also evaluate the house and pre-approve your purchase of a specific house.  Additional paperwork will likely still be required.
• Origination Fee:  This is the fee a lender charges for arranging you loan.  This is how the lender makes their money.
• Credit Score:  Your lender will pull your credit score to help determine the amount you can borrow.  Your credit score is a combination of the results of your past credit activity and other factors.