- Normally, I would apply for pre-approval from several lenders before shopping for homes.
- Instead, I interviewed landlords first to find out where I could live in the area.
- My real estate broker gave me advice on choosing a lender, and I ended up applying with only one company.
In my last two years as a mortgage reporter and editor, I’ve learned the importance of a pre-approval letter.
When the mortgage lender pre-approves you, they say they would like to work with you under certain conditions. The letter states the type of mortgage you have accepted, and the amount the lender will lend you. Showing the seller’s pre-approval letter can give you a chance to other potential buyers, so it’s usually important to have a letter on hand before you start shopping for homes.
But applying for pre-approval wasn’t my first step in the home buying process — despite two years of thinking about it. I wanted to take another step first.
I wanted to talk to a realtor before doing anything else
When you apply for pre-approval, the lender makes a hard credit pull that hurts you
. Before taking this step with one or more lenders, I wanted to meet with a realtor to see if my husband and I were in a good position to buy now, based on the local market.
We met up with a real estate team recommended by friends who have used these brokers to buy and sell their homes over the years. We talked about our budget and what we wanted in the home, and the landlords were honest about neighborhoods we could afford to research.
They also guided us through the entire home and mortgage application process at that first meeting, including any additional costs we might not have already thought of. By the end of the meeting, I felt confident that we were ready to begin the home buying process.
Then they asked if we already had a lender in mind.
Realtor Led Us To A Good Mortgage Lender
Originally, my husband and I thought we would apply for pre-approval from a local credit union. We thought a small community-focused company might have good customer service. We talked about working with the credit union we went through when we bought our car, because they gave us a great interest rate on the car loan.
Then the realtors told us that this might not have been the best idea.
Today’s seller’s market is hectic, fast, and multi
Work only during normal business hours. So if we’re looking at a house after dinner and need to talk about the details before making a show the next day, we may not be able to get through to anyone.
Real estate brokers have told us that credit unions will often only work with members, so our agents have had trouble in the past when they tried to contact a credit union about a mortgage, but the credit union would only talk to them if the member was present.
These were all factors we never considered, and I am glad we didn’t waste time getting pre-approved from a company that wasn’t a good fit for us in this market.
Instead, realtors said they have a few lenders they have worked with regularly and have had good experiences with. We chose to work with the lender and loan officer that our realtor used to purchase his own home. We left the meeting and almost immediately called the loan officer to talk about pre-approval. The following weekend, we toured the homes for the first time, ready with our message.
My style turned out to be the best thing about the home buying journey
In the “normal” housing market, shopping for lenders and getting several pre-approval letters was one of my top priorities. But in this market, I knew we had to move fast. It wasn’t uncommon for a house to be listed on Thursday and bids to be reviewed on Monday – and that was assuming the seller hadn’t accepted an early offer over the weekend.
Our loan officer was really good at his job and knew we were working with landlords who regularly offered him business. He was practically under our supervision and calls, answering phone calls and text messages at night and on weekends. We felt comfortable working with him because not only did real estate brokers use it when buying their home, but our friends who recommended it to our landlords also went through it and had a good experience.
He was also able to close at home three weeks after accepting our offer, which was one of the quickest delivery times I’ve heard of. We knew this could be attractive to sellers who want to get out of the house quickly.
Looking back, I might have done something different. I was going to ask our landlords the names of all the lenders they liked working with and they applied for pre-approval with each one so I could compare their interest rates and terms.
However, I have no regrets. Buying a home in today’s market was stressful and worrying, and having a loan officer I could rely on was one less thing to worry about.