If you are considering becoming a homeowner and buying a property for the first time you may well be looking for a Mortgage lender. In this article we offer you seven top tips on how to work with a mortgage lender for the first time. Read on to learn more.

7 Tips for Working With a Mortgage Lender for the First Time

Buying a house is an exciting time. Especially if you’re a first-time homebuyer! But it can be confusing too. Figuring out how the lending process works can feel nearly impossible.

Working with a mortgage lender can help immensely, but that comes with its own challenges too. Here are some tips for working with a mortgage lender so you can get the most out of the home buying experience and experience a little less stress along the way.

Know That Your Lender Is Highly Qualified

Your mortgage lender isn’t just someone the bank hired to fill out paperwork. They are highly qualified professionals who truly want to help you get your dream home.

Mortgage lenders must hold a license, and they undergo an MLO license renewal process on a yearly basis. This ensures lenders are up-to-date on all the latest mortgage regulations. They know exactly what needs to be done to make sure all the T’s are crossed and I’s are dotted so your purchase is legal.

Because so much goes into being a mortgage loan originator, most of the people who do it feel very passionate about helping people buy a home. Chances are, they are passionate about helping you get your first home too.

You Gotta Know the Numbers

As you work with your mortgage lender, and even before, it’s important to dig into the numbers. There are a lot of numbers you’ll need to know in order to figure out which home to buy, or whether buying a home is even possible.

Your credit score is one of the most important numbers to know. There’s no need to have a mortgage lender run your score if you know it isn’t good enough, as your credit can take a hit with the inquiry.

You’ll also have to determine how much home you can afford based on your current income, as well as how big of a down payment you’re prepared to make. In 2021, the average first-time home buyer put down seven percent. The higher your down payment, the lower your monthly payment, so it’s an important amount to consider.

Talk About All of Your Mortgage Lender Options

A mortgage isn’t just a mortgage. There are different kinds of mortgage options you will want to talk about with your lender.

A few mortgage types to consider

• Conventional loans that require a credit score of at least 620
• Jumbo loans for houses in higher-cost areas
• Government-backed loans, like USDA loans for low-income borrowers
• Fixed-rate mortgages that maintain the same interest rate over the life of the loan
• Adjustable-rate mortgages that have interest rates that change over time

There are other options too, like interest-only mortgages and piggyback loans that may be a good option, depending on your situation. Make sure you talk to your mortgage lender about all of the options that are available to you.

Don’t Be Afraid to Shop Around for a Mortgage Lender

It isn’t uncommon for homebuyers to go to their bank in order to get a mortgage for a home. It’s convenient to have a mortgage and a checking account at the same bank, but that doesn’t necessarily mean it’s the best option.

There are a lot of mortgage lenders out there competing to get your business, so some mortgage lenders offer lower rates than others. It’s well worth your time to shop around a little bit before you decide on which lender you’re going to go with.

If you’re serious about finding the best deal, you might want to consider working with a mortgage broker. They are usually approved by many different programs, increasing your chances of getting the perfect mortgage for your new home.

Get a Pre-Approval

When you’ve settled on a lender and know how much you can spend, you’ll want to get a pre-approval before you actually start touring homes.

A pre-approval letter is written by your lender. It states the amount that they’re willing to lend you. It’s a great document to have when you’re ready to make an offer on a home. It saves time and shows the seller that you’re serious about purchasing their house.

A lot hangs on the pre-approval letter

Keep in mind that a preapproval letter doesn’t guarantee that you’ll be loaned that amount. It’s also important to remember that only you know exactly how much you can spend on a home. Just because a lender approves a certain amount doesn’t mean you can afford the full amount.

Knowing your numbers ahead of time ensures that you don’t get carried away and buy a bigger house than you can afford.

Ask Questions During Closing

If you thought the homebuying process was confusing, wait until you pick your home and start the closing process! It takes a while to go through closing documents, so it helps to be prepared.

Make sure you set aside plenty of time to go through your closing documents with your lender. You should also ask your mortgage lender what to expect, especially because there will likely be at least a few materials and documents that you’ll have to bring with you.

Don’t be afraid to ask questions throughout the closing process. Clarify any fees or rates that have changed or any jargon that you don’t understand so you feel comfortable and confident buying your home.

Keep the Paperwork Safe

You must receive your closing disclosure at least three business days before closing, by law. Once everything is completed and you’re ready to move into your new home, find a safe place to keep the paperwork.

It can be a great resource for you if you have any questions in the future, like how much mortgage insurance you’re paying or whether your home insurance is included with your mortgage payment.

Buying a house for the first time is equal parts exciting and nerve-racking. Your mortgage lender can help, but only if you take the time to find the right one. With the tips on this list, you can ensure you get the perfect mortgage from the perfect lender for your perfect home.

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