This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and Corcoran McEnearney, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703.244.6115 or email [email protected]. You may also submit your questions to Corcoran McEnearney via email for response in future columns.
Question: What is a Mortgage Lender, and how do I choose the right one?
Answer: Unless you are buying your home with all cash, and congratulations if you can, then a significant portion of the purchase will be financed through a home loan. Although there are different options to secure funding, like banks, credit unions, online services, etc, it is usually easier and more efficient to go through a designated mortgage lender. Although your local bank may offer mortgages, its primary function is to provide financial services such as checking and savings accounts, personal loans, CDs, etc. A mortgage lender’s exclusive duty is to provide loans for the purchase of homes, land, and other real estate transactions.
So, what do mortgage lenders do, and what is most important to look for when shopping for a lender? A lender will evaluate a buyer’s financial situation, including their credit and job status, to determine what kind of loan they qualify for. It is important to go through this process because without it, a buyer doesn’t know exactly how much they can actually afford.
While it’s important to evaluate a lender’s reputation, differing fees and mortgage rates, many buyers overlook the critical criteria of availability or how easy it is to reach your lender. Real estate is not a 9-5, Monday-Friday industry, and if your lender operates within this time frame, it could potentially be very difficult to make an offer at 10:30 pm on a Tuesday or over the weekend, which is realistically when most offers are submitted.
One of the biggest mistakes that a buyer can make is not engaging with a mortgage lender early enough. Many decide they want to buy a house, meet with a Realtor, look at homes, and then – when they want to make an offer – call up a lender. This is the exact opposite of what you should do. Before you can make an offer on a home, you will need to provide a pre-approval letter from a lender. Finding out how much you can reasonably afford and the amount of the loan you get should be your first move in the home-buying process.
Just remember, all lenders are not the same! DO your research. Talk to your lender about availability, all fees associated with the loan, interest rate options, settlement fees, etc.
Find a lender who is willing and able to explain things in a way that you understand and is willing to answer any questions that you may have. This is likely the biggest purchase you have ever made, and your lender should show that they take that seriously.
If you need a great lender recommendation, contact The Peele Group for a list of our favorites!
If you would like a question answered in our weekly column or to set up an appointment with one of our associates, please email: [email protected] or call 703-549-9292.
Corcoran McEnearney, 109 S. Pitt Street, Alexandria, VA 22314, corcoranmce.com. Each office is independently owned and operated. Equal Housing Opportunity.
