Should I talk to a lender before I look for a house? When a new buyer starts talking to us, one of the first things we will always ask is have you talked to a lender yet? The biggest reason? We want to save time… time for us, time for you and time for sellers.
Most buyers when they start looking for a home will jump to a website with a mortgage calculator and plug in how much they want their monthly payments to be and hit calculate to produce that magic number. Now they have a selling price they think they should be looking for houses in. That only paints half the picture though. A professional lender is someone who will calculate into your purchase price taxes, insurance. lenders fees, HOA fees and closing costs for a house and will be able to figure that into your price range. Knowing this information going into the home buying process can save you a lot of time and heartbreak if you were to be looking at homes not in your price range.
Another reason to speak to a lender before house shopping is the lender may run across misinformation on your credit report which you will need to clear up. When the lender does find misinformation they can tell you who to talk to about the erroneous report and help you to get it cleared up. Getting your credit cleared up is something you will need to do before you can get the loan anyways, so better to start now.
Getting pre-approved will also help in determining what houses to look at. You may be approved for a VA, FHA or USDA loan, but not all homes will qualify for these loans. Knowing this information ahead of time will save you and your Realtor time in the home search process. It is very important that your Realtor knows these things so they can do their best job for you.
Some bank owned properties and even some private sales will require your Realtor to have a pre-qualification from your lender before they are allowed to show you the house. And when we submit your offer for that dream house when it is found, we just must submit an LSR (Loan Satisfaction Requirement) with the offer showing you are prequalified for a loan on that house.
Some may think it is a waste of their time talking to a lender first, but the truth it talking to a lender first can save you time and money in the long run.