As I see it, steps one and two in buying a home are interchangeable really, but I’m a Realtor, so I used “hire a good local Realtor” as step one. As I also mentioned in step one, timing is everything. After finding a home to purchase, the longest part of the process is generally the financing. Just as there are a lot of moving parts in closing a real estate transaction, there are equally as many or more moving parts to a home loan approval. It is for this reason I say step 2 to buying a home is find a local mortgage professional and get pre-approved!
Notice I said “local”. These days there are tons of online approvals and companies that “compete” for your business on the internet etc etc. That’s great, and you can certainly use one of these companies to get a “good deal”. But I say that every bank or lending institution is looking at basically the same rates. What distinguishes a good lender from a bad lender (or a good deal from a bad deal) is the programs they offer and their amount of communication. Different programs appeal to different people in different situations, so it’s nice for a lender to have a variety of mortgage products so that you can be “fitted” for a mortgage that suits you. Moving on to communication: I’m talking about contact between the loan officer and the Realtor. A Realtor needs to be kept informed during the loan process. I have dealt with some loan officers that were very poor at this part and it really made things difficult. Being in different time zones doesn’t help either. It shrinks the amount of time during a day that the loan officer can communicate directly with the Realtor (and with you, the buyer).
Now, if you don’t have a bank that you love or you just moved to town, your Realtor has undoubtedly worked with plenty of loan officers and should be able to recommend a few great ones. This is why I say that steps one and two are interchangeable. If you have a local lender that you already know you’re going to use, I would say step one is to get with that lender and start the approval process. However, if you have no idea who to use for your home loan, step one is hire a great local Realtor so that they can help you select a great lender. It also helps to have a pre-approval letter when you start looking at houses. If you see a great house, chances are good that someone else has already seen or is about to see it as their perfect home too. You have to be ready to buy on the spot once you start looking at houses or someone else who is ready will buy the home you love before you have a chance to talk to the bank.
The bottom line is that you want your offer to be as strong as it can be. When the seller of a home knows where the potential buyer is getting their money from, it makes the offer that much stronger. Make it easier on yourself. Be prepared. Have a Realtor on your side that knows what they are doing, and a mortgage professional ready to lend you money. These are the two cornerstones for successfully buying a home.
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