Does getting a mortgage feel like rolling the dice?
How much shopping around for a mortgage should you do? The short answer is enough to feel comfortable, but that doesn’t really address the question.
The reason for shopping for anything is to satisfy yourself that you got a good deal. When it comes to buying your home, especially true for first time buyers, there is a lot of integrated complexity and the mortgage process is often overlooked. Because I’m not a lender, I’m not going to tell you about all the intricacies from that perspective but instead from the purchase and real estate consultant perspective.
As your real estate consultant, I focus on helping you get clarity around what’s really important to you when it comes to buying your new home. And yes, part of that is getting the best possible deal both on the purchase price and terms and for the mortgage but if what’s truly important to you about having your new home is being in a place where you feel comfortable, that feels like “home” to you, then sometimes a compromise in the financial aspect is what’s needed.
Shopping for a mortgage, especially going the online route for a home purchase, may offer what seems like the best deal. You may save money by shopping around but does that help if you ultimately don’t get the house of your dreams? Online mortgage companies are more concerned about high volume than they are about personal service. Often times, your mortgage may take longer than it should to process causing you to fail to meet your contractual deadline for mortgage approval.
Another common obstacle in the mortgage process is the Appraisal. Although the lender orders the appraisal, they do it through an Appraisal Management Company who then puts it out to bid for Appraisers. It is quite possible to end up with an out of area Appraiser that does not have full access to local comparable properties that are required to accurately appraise the property you are purchasing. This means that your Appraisal could come in below the purchase price you have contractually agreed to and require you to bring in additional cash to close the gap between the appraised value and purchase price or potentially to lose the home of your dreams if you are unable to do that.
It’s also important to be aware that there are two contractual requirements regarding the Appraisal, one is value but the other is time. If you fail to meet your contractual obligation for either of these requirements, you are also at risk of losing your dream home.
By this time in the process, you have already spent about $1,000 on inspections and Appraisal of your own hard-earned money that you will simply lose if you are unable to complete the transaction.
Generally your best bet when it comes to getting financing for your new home is to talk to your qualified professional Real Estate Consultant first, and get their recommendations for best choice of lenders. Using a lender that your Consultant has confidence in based on experience also may help to secure your purchase offer over that of another when your Consultant is able to make a good case for your lender to the Seller’s agent.
It’s not just about getting the cheapest mortgage. It’s really all about getting a complete package that is affordable financially and gets you moved into your new home.
If this raises more questions than answers for you or if you are thinking about moving and want to talk more about that, feel comfortable calling 661.375.7325 to get all your questions answered.
Your friend in real estate,