Shop for a Lender

I’m on step 3 of my home buyers guide and I still haven’t mentioned anything about finding a Realtor. Surprised?  That’s because the smart home buyer is a prepared home buyer.  If you’ve educated yourself and determined a budget for yourself like I talked about previously, you are now prepared to find out if a bank will actually lend you the money you need. There’s no sense in getting all excited about a $300,000 home when all you can get approved for is a $200,000 home.

Talking to a lender is one of those things many of us are not prepared to do and a few guidelines would be helpful for us along the way.  First off, you need to shop around for a lender.  I believe it is wise to meet with at least 3 lenders before you make a final decision to “hire” one. Finding a lender is like finding a Realtor.(which we will talk about later)  It’s like a first date, an interview, and a sales meeting all combined into one experience.  You’re going to be working closely with this person and revealing all kinds of information to them, not to mention probably making one of the biggest financial commitments in your life. This is no time to let yourself get pressured into a situation you’re uncomfortable with.

Ways to find a lender

  • Ask a trusted friend, coworker, or a family member for a referral for someone they have experience using
  • Ask a Realtor you know for a reference
  • Contact a local non-profit housing organization for advice
  • Talk to your bank or financial institution

Once you’ve picked at least 3 to meet with, give them a call and set up an appointment to get pre-qualified for a mortgage.  Be sure to ask them what documents you’ll need to bring with you such as W-2s, tax returns, and banking statements.

Initial Fees Worksheet

Ask for an Initial Fees Worksheet from each lender you meet with.  This will be a breakdown of all the anticipated fees associated with obtaining a mortgage.  Be sure to have the worksheet written up for the same loan amount from each lender you work with to be certain you’re comparing “apples to apples”.  Please note, this is not the same as a Good Faith Estimate which is required by law from a lender at the time you apply for a loan.

Compare the Items Payable In Connection With Loan

Most of the fees on the worksheet will be the same, however the costs you want to pay particular attention will be under the section titled “Items Payable in Conection with Loan” sometimes with the number 800.  These are the fees that will vary from lender to lender and can sometimes be negotiated. Basically, this is where you see how much you are paying the lender to close your loan. If these

Sample Initial Fees Worksheet for Potential First Time Home Buyer

Additional Resources for Home Buyers

Working with Lenders – Freddie Mac Website

Mortgage Options to Avoid – Dave Ramsey

Consumer Corner – CO Division of Real Estate

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