So You Want to Buy a House: Talk to a Lender Before a Realtor
When you find yourself checking out the trendy shiplap in the bungalow on the corner, you might be ready for home ownership. Before you start swiping through your Zillow app, consider the story of Sam and Cara:
The Unsuspecting Young Couple
A young couple renting a basement apartment with future plans involving diamond rings and an online gift registry, Sam and Cara were a prime target for John: The "I’ll Make Your Dreams Come True Before You’re Ready" Real Estate Agent. John approached Sam and Cara with the starter home dream: a move-in ready three-bedroom, two-and-a-half-bath house with a playground visible from their own backyard.
That Escalated Quickly
Not even in the market for a home yet, Sam and Cara fell in love with it, made an offer, and soon were under contract. John then shopped Sam and Cara to several lenders, trying to force the loan to happen where maybe it shouldn’t have. Meanwhile, Sam and Cara have put down unplanned-for earnest money (and emotions) without knowing if they will even qualify for a loan.
After trying multiple lenders, they’re able to get a loan, close on the property, and move in. While thankful it all worked out, Sam and Cara are now locked into a payment they aren’t fully comfortable with while facing the other surprising costs of home ownership.
This all could have been easily avoided if Sam and Cara had met with a lender first. Mortgage lenders will provide you with a document checklist to start the path toward loan pre-qualification: code for a less stressful home search and mortgage closing process. Pre-qualification tells you how much house you can afford based on your personal finances, focusing your search and helping you avoid disappointment. Even the most trustworthy realtor can overlook advising their first-time home buyer clients on the unanticipated transactional costs and closing costs of buying a home. Talking to a lender first allows you to know what you can afford and what to expect so you can work confidently with your realtor to find the property that’s right for you.
Opportunity Bank of Montana