4 things our loan officer friends want homebuyers to know
No matter how long it takes, the journey of buying a home – especially your first one – is always complex. That’s why it’s important to surround yourself with the best real estate professionals in the business. We’ve used this space to talk about the importance a credit score can have on your loan, and the fact you don’t need 20 percent down for a down payment these days, but our teams wanted to share some more tips you should know from the lender’s perspective.
You can start your search with a loan officer you trust.
We’ve talked about the importance of being pre-approved early in your home search process. Still, it’s worth noting that you can actually start your journey by talking to a loan officer, before connecting with a REALTOR®. Starting here will help narrow your search to where it needs to be, at least according to one loan officer. “You should figure out your financing options first and then pursue the product. You wouldn’t test drive a car that you don’t have the ability to drive.” We’ll stay neutral here and say it’s most important to make sure you’re working with an agent AND a loan officer you like.
Pulling your credit won’t make or break your application.
Yes, your credit score is important, and yes, a hard inquiry does minimally ding your score. However, that’s very temporary. Shopping around for the best rate and situation won’t hurt your credit score enough to determine if you get a loan or not – no matter what myths you may have heard. Plus, while a hard inquiry stays on your credit report for two years, it only impacts your score for about a month and a half. The bottom line: this is a traditional scare tactic from some lenders to prevent you from shopping around. Don’t fall for it.
PMI is not as evil as you think.
Private mortgage insurance is essentially a fee the buyer pays if the down payment is smaller than, typically 20 percent, but it doesn’t have to be all negative. PMI rates are at an all-time low, according to some of our loan officer friends. That’s right, the amount you pay for PMI is not set in stone. In fact, a good loan officer can help you get the best rate when it comes to this payment too. Furthermore, if you’re working with a knowledgeable loan officer, they may have a funding option you haven’t discovered yet.
Different loan officers and banks offer different rates – and services.
Thanks to inflation and the Federal Reserve, rising rates have dominated the news headlines – and all conversations in real estate – lately. However, it’s important to mention that the final interest rate that you’ll be paying on your mortgage can vary from lender to lender. Plus, some loan officers and companies/banks have specialties when it comes to home loans. Like most scenarios, picking the right lender comes down to what you need the most for your situation. Don’t be afraid to ask questions or reach out for good referrals.
The bottom line is that our lender friends are another group ready to help you to the finish line of any real estate transaction, and it’s important to surround yourself with professionals who will serve your needs the best.