Buying a house is easily one of the most stressful times in life. Both a change in residence and that act of taking out a mortgage are listed on The Stress Test (Life Change Index Scale), proving that the whole process can have a significant effect on our stress levels. Although this stress is completely understandable, it is also unfortunate as purchasing a new home is an important milestone and something to celebrate!
If you are considering purchasing a home in the near future, there are a few steps you can take that will make the process less stressful. We at DC Lending want prospective homeowners to enjoy finding their dream house and be confident in their purchase.
1. Focus on Finances First
We all know how tempting it is to start touring beautiful homes as soon as the decision to buy a house has been made. The online search begins - the open houses lure us in. Sadly, many people end up falling in love with homes they unknowingly cannot afford. It is also common for buyers to end up losing the opportunity to make an offer on a home because they have not yet been pre-approved. These situations are stressful and disappointing, to say the least.
There is a simple solution to this issue - set yourself up for success and start with financing. Find the right lender and get pre-approved before you start searching for the perfect home. This will give you the information you need to find the right home, and the confidence to make an offer.
2. Choose the Right Lender
A mortgage is a big commitment, and it is important to shop around to find the right price and terms. There is a common misconception that all mortgage prices are the same, but there are actually major differences that will affect the entire life of the loan. Here are some quick tips when searching for the right lender:
A good loan officer will not mind if you are shopping around for the right price.
Be wary of lenders who are overly aggressive or pressure you to only use their service. Your loan officer should genuinely have your best interest at heart. A good lender should educate you on your mortgage options, and give you time to make your decision.
Look at the big picture - not just the interest rate.
Be sure to ask about all the expenses associated with the loan - what is due at closing, who covers the cost of inspections, and how to avoid paying private mortgage insurance. DC Lending will offer lender credits that can reduce or eliminate your closing costs at a slightly higher rate.
Ask about the average length of closing time
Find out how long they usually take to close and how often they close on time. You want to choose a lender that has a reputation for being efficient, as the process can get complicated and costly if you don’t close on time. On average, DC Lending loan customers are cleared to close in less than 21 days.
3. Get a Referral for a Real Estate Agent You Can Trust
A buyer’s agent is paid by the seller’s proceeds, which means they are a free service for the buyer. Finding a great real estate agent will make the home buying process far less stressful. Ask your friends and family for real estate agent referrals and ask your lender who they would recommend. Lenders work with many agents and often have good insights on who is easy to work with.
Don’t rush to choose an agent - make sure you find someone you trust and who listens to your wants and needs. Your realtor should understand the market and will be able to coach you on what to offer. An experienced realtor can gauge the situation and make suggestions about how to get the seller to pay closing costs.
Realtors also have experience with inspectors and can make recommendations on who you can trust. They can also help you navigate the negotiating of fixing any problems discovered during the inspection before closing.
4. Get Your Documents Together in Electronic Form
Your lender will have a list of documents that are required, such as income statements, bank statements, and driver’s licenses. Getting these in order ahead of time and sending them to your lender will help avoid those last minute document scrambles.
5. Respond to Your Lender Quickly
Your lender may have a streamlined system in place, but the pace of your loan transaction is set by you! The faster you move on communication, the faster you move in.
Be prepared with documents and be sure to send your loan officer everything they need right away.
Read your emails thoroughly and carefully. These emails from your lender can be printed out and used as a checklist throughout the process to help you stay on track.
Keep your realtor and lender on the same page. Many realtors and lenders use 3-way texts with their borrowers to keep everyone in the loop at all times.
6. Be Aware of Wire Fraud
Wire fraud is on the rise and it can be prevented by being very careful with your down payment. Either deliver a cashier’s check to the title company the day before closing or be sure to confirm 100% that you are wiring to your title company.
Do not send money to anyone who calls you or emails you asking that you wire to an alternative bank. That is the number one way to lose your hard earned down payment.
7. Keep Things in Perspective
During the home buying process, you are likely to feel a wide range of emotions. All of these feelings at the same time can be overwhelming and confusing. First, remember that this is normal. Second, try and focus on the big picture. You are about to buy a new home where you will start making important memories! Focus on the positives and soon those treasured house keys will be yours!