Once you’ve taken a good look at your finances and felt for sure you can finally afford to buy a home, it’s easy to start hunting for one right away. Many first-time home buyers do the same. But it’s not a smart idea if you intend to apply for a mortgage to finance the purchase. The first thing you need to do is talk to a lender. Here are three reasons why:
You Get to Set Realistic Expectations
Few things are as disappointing as finding a home you really like and then realizing that you can’t afford it after talking to the lender. That’s why you need to speak with your bank first to find out how much loan you qualify for, how much down payment you need, the current mortgage rate in Salt Lake City, and so on. This way, you know which houses you should look at.
You Appeal More to Sellers
Most sellers aren’t too enthusiastic to negotiate if they discover you haven’t been pre-approved for a mortgage. This is especially true if you intend to buy in a hot real estate market. You need to prove that you’re serious about making the purchase. Showing that you can indeed sign the check catches their eyes, and the negotiation process goes much more smoothly.
You Learn about the Closing Fees
While you may have what you think is sufficient money for the down payment, you need to realize that there are closing fees too. You’ll need to pay points, title insurance, mortgage insurance, etc. Unless you talk to your lender first, it’s tough to get a sense of how much you’ll need to pay, and whether you have enough money in the bank to do so.
Buying your first home can be trickier than you imagine. By consulting a reliable lender, you can understand what’s involved and go through the process faster.