Dear Buyers: Here’s why I recommend a mortgage broker when choosing a lender for your home buying journey
If you follow the news at all, you know that the Pierce County real estate market is hot, like- too hot in the hot tub can’t even dip your toes in- hot. To be exact, “Tacoma is now the nation's hottest housing market, with half of all homes there pending sale in just six days, down from 21 days a year earlier, according to a newly released survey.” A big factor contributing to the market’s hotness is how low interest rates are, and what I want to share with you today, is the importance of working with a good lender.
Before I purchased my first home I did not understand that not all lenders are created equal, nor can all lender’s do the same things. The first thing we need to break down is that there are different types of lenders: Banks and Mortgage Companies. I’m going explain what the differences between the two are and what I recommend going with and why. Most people’s initial thought is to get a home loan with their…
Bank: Your bank might be the initial natural choice, but as a realtor and someone who has been purchasing properties for years, I’ve learned firsthand that banks do banking well, not necessarily home loans. My main complaints are: A) When you’re using your bank, they only work bank hours! This market is hot, and if a property comes on the market on a Saturday, you might want to be putting your offer in that day! You will not have the bank lender’s personal cell phone, which means you won’t be able to get a personalized approval letter until Monday, and by that point, the house you want may well already be in mutual with someone else. A committed lender will give you their personal cell phone number, will answer the phone when you call, and will be available to work for you morning noon and night, no matter what day of the week it is. B) Bank’s have much stricter guidelines for their loans. They often require a higher credit score (if you’re buying as a couple, it’s usually based off of the lower score), and often want a higher down payment. Additionally, they have more restrictions on the actual house itself... You might find your dream home, but the bank might say no-no if the house doesn’t have trim installed! Such a minor flaw is not worth losing your home over.
Mortgage broker: A mortgage broker is a company that has the ability to write their own loans AND, shop the market for other loans. A mortgage broker is able to see what different loan programs are you qualify for, and then shop around to get you the best loan (think rate, reserves etc.) that work for you. The right mortgage broker is going to give you their personal cell phone number, they’re going to work weekends for you, they will personalize your approval letters, and even call the seller of the property you want to advocate for you! The difference between a local mortgage broker and a bank is night and day. I recommend getting quotes and pre-approvals from a few different mortgage brokers, so that you can find the best fit, each lender is different. Interview before you make your decision! Call them in the middle of the night to see if they answer!... just kidding. But seriously, make sure that you have a lender that is going to work for you, because in this market, it can mean the difference between getting your house, and missing out!
I’ve had a few situations where the buyer’s didn’t shop lenders at all, (this happens a lot, especially if they have a friend who’s a lender) and ended up dealing with a big headache! Ask your lender about how they handle appraisals, if contractors can be paid out of escrow, if they take calls on the weekends, and if they can beat the rate you received from your other lender. My goal as your realtor is to give you the information and teach you that not all lenders are created equal. Your lender and I will work together to make the home buying process as smooth as possible! I find that this works best when you have a local real estate agent teamed up with a local lender. Having a local real estate team that knows this specific Pierce County area can definitely give you a leg up in this seller’s market. Please reach out today!