When embarking on the exciting journey of finding a new home, it's only natural to wonder where and how to begin. In a landscape brimming with information, the challenge lies in separating the wheat from the chaff, in identifying the reliable from the overwhelming. However, here's where an experienced Realtor can be your trusted ally right from the start. Beyond just helping you uncover the ideal home, a skilled Realtor can introduce you to a local lender, a vital asset in the complex realm of real estate.
A local lender's expertise is a valuable advantage. They possess an intimate understanding of market dynamics, boast connections with key players, including fellow agents, and, importantly, tend to be more accessible, even on weekends. Prior to embarking on your online house-hunting expedition, consider the wisdom of reaching out to a seasoned real estate agent. They not only guide you through the labyrinthine process but also assist in defining your budget and securing the necessary financing for your upcoming home acquisition. It's an approach that blends sophistication with approachability, ensuring a seamless journey toward your dream home.
Finding an exceptional real estate agent and a trusted lender marks the first step on your journey to homeownership. This decision is arguably one of the most significant you'll make in your life, as it directly influences the process. It's not just about acquiring a house; it's about finding a place that resonates with your goals, your dreams, and your lifestyle. To ensure this harmony, it's important to choose professionals with whom you feel genuinely comfortable – individuals you can openly share your aspirations with, seek counsel from, and ask any questions that may arise along the way. This is not the time to be shy about what you want.
However, sometimes we need more information before we can know what we want. To that end, here are five crucial questions to ask your lender:
- "What mortgage options are available to me, and which one best aligns with my financial goals?"
- "Can you provide a clear breakdown of all associated closing costs and fees?"
- "What is the interest rate, and how is it determined for my specific loan?"
- "What is the estimated timeline for the loan approval process, and how can we ensure a smooth and timely closing?"
- "Are there any prepayment penalties or hidden clauses that I should be aware of in my mortgage agreement?"
These insightful inquiries, tailored to your unique circumstances, will empower you to make informed decisions and ensure that your journey to homeownership is a rewarding and well-informed one.
Do I need to get pre-approved for a mortgage?
Unless you plan on making a cash offer, every homebuyer will need a mortgage. Did you know that when you get approved for a mortgage, you can get a pre-approval letter? This lets the buyer and Realtor know you are financially able to purchase the home. In some cases (or almost ALL cases in the Denver Metro area), you will be required to show proof of approval when you submit your offer. It conveys to the seller that you are not only reliable but you are also prepared for a quick sale. While some pre-approvals can take up to 10 days to process, it can take much less time if you have your information ready to go..
What are the advantages of getting a pre-approved mortgage?
It's a smart move to talk to different lenders, ask questions, and find one you feel comfortable with - I'm here to provide some great recommendations for this. Good lenders don't just offer money; they can also help you figure out the best way to structure your loan, which is super important. In today’s world, getting pre-approved is a must if you want to be competitive, and finding the right lender will set you up for success both for your own finances and as a strong buyer. FYI: Local lenders can have a big advantage over other lenders especially in Denver’s competitive market. They may know the other agent, they know the market and they know what it takes to get the deal done.
Help with the big picture
Lenders can be invaluable in shaping your loan to make it easier for you. When you're getting money to buy a home, it's not just about getting cash; it's about getting it in a way that suits your financial situation and goals. Think of a good lender as your money guide.
Good lenders have different options for loans, kind of like different flavors of ice cream. They talk to you about your money situation and what you want to do. Based on that, they suggest the loan that fits you best. For example, if you plan to stay in your home for a long time, they might suggest a loan where your monthly payment stays the same. If you might move in a few years, they might suggest a loan with a low starting payment that could change later.
Help with Down Payments
Many first-time buyers have questions about how much money they need to put down. Lenders can explain the ways to do this, like government help or money from family. They help you figure out what works best for you.
Interest Rate Smarts
The interest rate is like the price tag on your loan. It affects how much you pay every month and in total. Good lenders don't just give you a rate; they explain why it goes up and down and help you get the best deal. They can also share tips for managing your rate over time.
Picking Loan Terms
Lenders can help you choose how long you'll take to pay off your loan, like choosing between a short game and a long game. Shorter loans have bigger payments but less overall cost. Longer loans have smaller payments but more cost over time. They help you pick what suits your budget.
Great lenders look at your whole money picture, not just your loan. They think about your long-term money goals, like saving and investing. They help you make choices that fit your plan, like building up your home's value or managing your debts.
At the end of the day, a good lender isn't just a money provider; they're like a money coach, helping you make smart choices about your home loan that fit your wallet and dreams. When you talk to a lender, don't be afraid to ask questions and get their advice – it's what they're there for!
Make an offer with confidence
Knowing what your budget allows for and what your monthly payments will look like can help you when negotiating a home purchase. You don’t want to be in a position where you are making monthly budget decisions on the fly. A pre-approved mortgage will tell you exactly where you stand and what you can comfortably afford.
Take the guesswork out of loan approval
You might be confident of your ability to get a loan. You have a great credit score and a significant down payment. But what rate are you expecting to get? Mortgage rates will vary from lender to lender. And lenders may have different requirements. If you get a head start on approval, it will prevent you from uncovering any unwanted surprises later down the road. Oh… and if the rate sounds too good to be true, it may be. So, you want a lender you can trust.
Confirm you are a low-risk buyer
It’s no secret that today’s economy is a seller’s market, for the most part. That means you have to compete with other buyers willing to pay the same or even more for your desired property. When the seller is choosing who they want to go with, impressions can play a big role. I always advise my clients to take the time to get pre-approved because that lets the seller know you are unlikely to have any issues that could delay closing on a home.
When should I start the approval process?
Typically, mortgage pre-approvals are good for 90 days
. The lender will need to perform a background and credit check. Once approved, you should expect your approval letter within ten business days. This means that pre-approval is intended for buyers who are serious and ready to move into a home within three months. If you don’t buy a home within three months, you may need to get approved again. If you are even remotely interested in looking for a home, you should begin the search for a lender you feel comfortable with. And if you’re really interested in buying, the time to get pre-approved is now!
Are there any disadvantages to getting pre-approved?
Getting pre-approval for a mortgage usually involves a hard hit on your credit report. I always reassure my clients that this isn’t anything to worry about. But it does count as a credit inquiry that you might see on your monthly report. Of course, this is a necessary part of any loan. Credit inquiries are only tracked because a large number of inquiries in a short span might hint at a credit problem for some lenders. But for most buyers, this is entirely normal and nothing to worry about.
Do I need a real estate agent to get pre-approved?
No… but of course, it helps! Talking to me will be helpful, especially since I have great relationships with reliable lenders. I can put you in touch with them and even support you as you make the decision on who you’ll ultimately go with.
In general, having a Realtor to work with on your home buying journey can be a great help, especially if this is your first time. Getting pre-approved for a mortgage saves everyone time in the long run. It lets the buyer identify their budget and lets sellers and Realtors work with you as a confident, reliable prospect. As a Realtor and an Accredited Buyer’s Representative (ABR®), I’m here to advise my clients and make sure everything goes smoothly. If you need advice on the pre-approval process, we can absolutely discuss it further.
Partner with an expert
Top markets in Denver, such as Cherry Creek real estate, Wash Park, or Platt Park, are in high demand. With so much competition in the luxury home market, you need an agent who can match your passion for beautiful homes. I’m Kimber Ward
, an established local real estate agent with a track record of connecting satisfied families with amazing homes. I love to meet new people and develop real connections with clients. If you are looking to buy a new home in the Denver area or have questions about Cherry Creek homes for sale, please don’t hesitate to reach out!
*Header image courtesy of Kimber Ward