3 Huge Reasons To Talk To A Mortgage Lender Before You Start House-Hunting — The Brokerage Real Estate Enthusiasts (2024)

FAQs

3 Huge Reasons To Talk To A Mortgage Lender Before You Start House-Hunting — The Brokerage Real Estate Enthusiasts? ›

Working with a lender can give you a clearer idea of what else you'll need to budget for and how much they'll cost, including lender fees, title and insurance, appraisal fees, and other closing costs. There's nothing worse than finding the perfect property, only to find out that it's outside your price range.

A good broker works with you to: Understand your needs and goals. Work out what you can afford to borrow. Find options to suit your situation.

By having that conversation early on — even if you're still a few years away from buying a home — you'll be able to get your lender's input on what you'll need to do over the next few years to afford the kind of house you want to buy.

You should have your first conversation with a mortgage lender six months before you plan to buy a house. The role of the lender isn't just to underwrite a loan, it's to help the buyer apply for a mortgage, and to get them ready ahead of time.

The short answer: as soon as you've got a property goal. The longer answer: whether you're scoping out your options, have a long-distance goal in mind or you're ready to enter the property market (like, yesterday)… chances are you'll benefit from having a chat with a mortgage broker.

Realistic Expectations: One of the primary advantages of speaking to a lender early in the home-buying process is gaining a clear understanding of your financial capacity. A lender will assess your credit score, income, and debts to provide you with a realistic estimate of how much you can afford to borrow.

They often help you complete the paperwork, so your application should be dealt with faster. They'll help you take all the costs and features of the mortgage into account, beyond the interest rate. They should only recommend an appropriate mortgage for you and will tell you which ones you're likely to get.

What to do before talking to a lender? ›

a Bank. A mortgage broker can offer a wider array of options and streamline the mortgage process, but working directly with a bank gives you more control and costs less. Kate Wood joined NerdWallet in 2019 as a writer on the homes and mortgages team.

State your budget and ask about the details of the loan including the down payment, closing fees, APR, whether it's fixed-rate or adjustable, and any other fees. Compare multiple offers and don't sign anything with blank spaces, ballooning rates, or a clause not to sue.

The five C's, or characteristics, of credit — character, capacity, capital, conditions and collateral — are a framework used by many lenders to evaluate potential small-business borrowers.

In addition to reviewing credit histories and assessing the ability to make a down payment, banks and lenders often review their applicants' employment histories. Lenders want to ensure that borrowers can afford to make regular mortgage payments.

The general rule is the higher a borrower's credit score, the higher the likelihood of being approved. Lenders also regularly rely on credit scores to set the rates and terms of loans. The result is often more attractive loan offers for borrowers who have good to excellent credit.

It's important to see a mortgage adviser at the start of your mortgage journey whether it's your first mortgage or you're looking to re-mortgage. It will save you a lot of time and effort in the long run. It's a good idea to speak to a few different firms to see what's on offer and to compare fees.