A mortgage lender is typically a bank or other financial institution that issues mortgages, though it could also be an individual who “totes the note.” Traditionally, home buyers looked for a mortgage lender after they had found a house to buy, but today’s savvy home buyers begin working with a lender before looking at properties. It’s a good way to avoid my 10 First Time Home Buyer Mistakes!
Why find a mortgage lender BEFORE you find a home?
1. To establish a reasonable price range
Lenders will tell you exactly how much home you can afford under their guidelines and how much they’re willing to lend you based on your credit score (Get your free credit score at GoFreeCredit.com). Once you know how much home you can afford, you can shop for a house that won’t blow your budget.
2. To get preapproved
Nothing makes a seller more nervous than a contingency clause enclosed inside an offer to buy. Sellers almost always feel more comfortable when a buyer has been preapproved for a mortgage loan. Another advantage to the buyer … buyers who have been preapproved may have more leverage in negotiations with the seller. You’ll also stand out if several other buyers are bidding on the home you want because you can set an earlier closing date without having to wait on an approval process to run its course.