Buyers: Start with the Mortgage

It’s Buyer’s Week on the Greater Hartford Real Estate Blog. Yesterday we outlined the current opportunity for buyers, and today we’re talking mortgages. Check back each day this week for another post specifically for buyers.

Unless you’re independently wealthy, the first step in buying a home is talking with a mortgage professional. They are the gatekeeper in the whole purchase process; checking credit, verifying income, and generally making sure that you are qualified to secure a gigantic loan from risk adverse lenders. From a buyer’s point of view, there are two main reasons to get this out of the way early.

Flowers in the Fall1. Mortgage people may tell you things about your credit you didn’t know. Unfortunately most of the surprises here are bad ones. Finding out about a credit problem is by no means the norm, but the sooner you know about an issue, the sooner you can address it and start building your score back up.

2. It’s depressing to look at houses you can’t buy. Some buyers can’t buy a house because a credit problem will prevent them from getting a mortgage. Others can get a mortgage, but their income qualifies them for a smaller loan than they expected. Either way, it is depressing to look at homes you cannot buy. Buyers are always trying to get as much as they can at their price point, and when they suddenly learn their price point is way down there (or zero), they lose a lot of the excitement that initially comes with the search. Looking in the appropriate price range from the beginning is the way to go.

Getting preapproved for a mortgage is a quick process, so really there’s no excuse for not doing it. And since you’ll need to have it in hand before writing an offer, you might as well get it out of the way at the beginning of the search process.

Even after the credit crisis there are still many places you can go for a mortgage. Regional or national banks, specialty mortgage brokers, and credit unions are the main options we see our buyers choosing. It’s worthwhile to call a few different places to compare rates and terms because they can vary. In addition to asking about current mortgage rates, we would also suggest you ask about points, estimated closing costs, when in the process you can lock in a rate, the length of the rate lock, and how long recent mortgages have taken to get through underwriting.

If you’re thinking about a purchase, we would be happy to take a few minutes to talk with you about the process and pass along some mortgage contacts if you need them. Just let us know how we can help.