We have the option to ease into our search with only a pre-approval finalized but without a lender chosen. However, the advice a selected loan officer gives us early on and the financial details such as closing costs, costs to close, and how much it would cost to buy down an interest rate for a specific home would be beneficial in many ways.
A home buyer generally has three options (general as in nationwide and not considering any market conditions here and now):
OPTION 1: Shop lenders after getting under contract. Rarely an option here in our market, but I’ll advise you if we have this option based on the market conditions of the submarket we are searching in.
OPTION 2: You just go with a lender that an agent works with. I have recommended lenders that are tried and true that I use myself and I strongly encourage others to use them.
OPTION 3: A buyer can use my Lender Comparison Exercise before starting a home search. This is a hybrid of having both a lender as a resource early on AND knowing that we are getting the best rates. Having a lender early on in our search gives the loan officer the time to continuously look for products, programs, and ways of how to get you even better rates or even lower fees. It also gives the buyer time to fix any credit history inaccuracies and mistakes as well as follow the advice of a lender to improve the credit history for the best interest rates.
After going over www.brianhuie.com/lenders, follow these steps if you choose to shop for a lender:
2. Connect
Reach out and chat with 2-3 lenders. Comparing more than 3 can become too confusing as we aren’t comparing apples to apples. When you chat with them, fill out the [yellow] portion of the comparison spreadsheet.
3. Collect
Collect all the loan officers’ weblinks to their application page. Fill out the [green] portion of the comparison spreadsheet.
4. Apply
On a Saturday, set aside 2-3 hours and submit applications to all of the lenders and submit ALL of the required documents. Allow all lenders to pull credit.
5. Credit
On Monday, the lenders will pull your credit but should finish your preapprovals Monday-Wednesday.
6. Update
After you receive your last preapproval, let me know! We’ll pick a home that just hit the market that week (new listings hit the market Wed-Fri).
7. Send
On Thur morning, we’ll send the listing to the lenders and ask them for:
closing costs
soonest closing dates
interest rate
monthly payments for that home
Fill out the [blue] portion of the comparison spreadsheet as you get the requested information. Also, update the green portion of the spreadsheet!
8. Compare
We’ll compare rates, costs, AND your comfort of their expertise, communication, and availability. An interest rate difference of 1/2% is notable while a difference of 1/8th percent is less important than someone who we can trust and talk to 24/7! Two of the most important traits of a lender are how accessible they are and how comfortable you are with reaching out to them with any questions at any time.
