When you decide that you are ready to follow the American Dream of homeownership, most people will hit the internet and drool as they scroll through all the wonderful homes available. Pictures with large trees and front porches are stunning. Ones with a pool lure you into dreaming about spending hot summer days floating on a unicorn inflatable raft while the grill is cooking away. That three car garage is a must. Of course! Where else are you going to park your new Jet Ski? You start dreaming bigger without knowing how much the down payment will be. Let alone be able to calculate the monthly payment. (Yes, Zillow does give an estimate but rarely is it even close to accurate) What about MI? Taxes? What Taxes? How much is Homeowners Insurance? Does my Rottweiler-Wolf mix dog affect the cost? You make a list of must haves and call a Realtor whose picture you saw on an ad. You announce proudly that you are ready to buy that dream home! Here comes the tricky part, this should be Step 2 in the home buying process.
Hopefully the Realtors first step is to correct your first step and have you call a Mortgage Lender who they enjoy doing business with. In our industry, Mortgage Lenders spend a fair amount of time wandering from Real Estate Office to Real Estate Office talking to the Realtors they find along the way. We sell ourselves on how good we are, how many years we have been closing mortgages and how fast we return phone calls. Sometimes we become friends with a Realtor and, as everyone does, we refer our friends above all others. It is only human to want to help people we are friends with. Here is the scary part. Some people, even though they are friends, are not very good at their job. Oh sure they may be competent, but remember, you are uprooting your whole life. Buying a home that you will live in for many years also means you are going to be paying a mortgage payment FOR MANY YEARS! Do you really want to shoot for competent and hope for the best? Or do you want to know that the person responsible for that creating that monthly mortgage payment IS the best?
The entire industry has avoided making the correct step the first. Instead what happens is what should be the second step is usually the first. Then you have to back track to what should be the first step as an afterthought. It is one of the biggest flaws in the industry. Most people, when thinking about purchasing a home, do what only make sense as a first step. They call a Realtor. If you are lucky, they will direct you to an amazing Mortgage Lender with a great team and a ton of experience. Since you are reading this, consider yourself fortunate because you have found one.
Before wandering the internet to find that perfect home for your family, you really should research Mortgage Lenders before anything else. I know this is boring. Guess what? Our job is boring to most people. Watching a person flip through your documented income, number crunching along the way is like watching paint dry. I am very aware that in the process of home buying, walking through potential homes is vastly more exciting than watching me poke around your financial documentation. In the end, my response to your ability to buy a home may put a wet blanket on your must have wish list for a house. If I am not excellent at my job, you may get that dream home but you may also pay more. You may end up getting stuck with a payment you can barely afford. One bump in the road and it can be a financial avalanche. Exciting job? No. However, getting you into something you can truly afford and still maintain a life of fun for you and your family is much more important than most people think.
So jump on Google, get some names of Mortgage Lenders and read some reviews. If a Mortgage Lender is wonderful then that trail of internet bread crumbs will lead you to that fact. If a Mortgage Lender is not so wonderful, same trail of bread crumbs will confirm this too. Once you know how much money you will need to close and how much of a monthly house payment you can comfortably afford, you can focus on looking at homes that are within you budget and choose the perfect home for your family. Hopefully you scored that pool for your unicorn raft!