You are looking to buy a new home. You know the area where you would like to buy. You know the style of home you want. You think you know that the price range is right, but you are not sure. And you have not spoken with a mortgage lender yet. Stop right there and regroup.
As a longtime mortgage lender, I think the first step a buyer should take after they have determined they want a new home is to choose a lender. If a mortgage is going to an interregnal part of the purchase process you should get a lender involved from the start.
So how do you choose a lender? What questions need to be asked? And does the lender not only have the experience but the mortgage product needed for your situation?
I suggest that you phone a couple of lenders and discuss your thoughts on what you are looking to buy and what you anticipate to spend. Listen to the lenders' questions and do not be afraid to ask how long they have been in the mortgage business. I also suggest that you ask if they have access to more than one or two investors. As an example Wells Fargo has some very good mortgage programs but they have weak points. It is not unlike going into a Ford dealer and wanting to see a Chevrolet. Not all mortgage brokers and bankers have access to wide variety of mortgage programs. I know from years of experience that some of the investors I work with have holes in their mortgage variety. They may be great at financing W-2 employees, but they are not great with self-employed borrowers. So ask the lender if they have investors for your particular situation.
Then make sure that the mortgage broker is licensed with the State of Colorado. Brokers must be licensed, which means they have passed the minimum requirements of the state, plus have posted an insurance bond. Unfortunately, mortgage bankers, who provide the exact same service, are not required to be licensed with the state.
After interviewing a couple of lenders you should be able to make a determination if the lender has the experience to help you and the investors with investors that can finance your purchase. Remember that in many cases the purchase of a home may be the largest investment you make in your lifetime. You need not be shy in asking questions and expecting answers. Ask for referrals from not only past clients but ask for references from Investors. I for one love to give out a list of references as I know that I would not have been able to stay in business for as many years if I was not doing something right.
Plus, by taking the step to have a lender working with you from the very beginning I will guarantee if you chose a good one the whole purchase process will go much smoother.
Bob Kieber can be reached at (970) 262-1199 or at email@example.com. He is a local mortgage lender and principal of Resort Lending.