Why Choosing the Right Lender is So Important
We like to meet with our Buyers in person prior to going out to see any houses. One reason for that is so we can sit in a relaxed environment and get to know their wants, needs, and what is driving their home purchase. Another reason is to go through a flow chart of the home buying process. As full-time Realtors, we do this on a monthly basis. We know the process inside and out and can tell you where the pitfalls and hang-ups will be if there are any. If our client has not already spoken with a lender about pre-approval, we discuss this and explain why choosing the right lender is so important.
There are many different types of lenders as well as types of loans. When we are discussing our client’s desires for a home, this can clue us in on certain lenders that would be a good fit for them. For instance, if you are buying raw land, you can’t just walk into any bank or lending institution and get a loan. Not all lenders are set up to give loans for raw land. Another example is mobile homes or houses without a permanent foundation – like some “tiny” homes. There are very few lenders that can handle those loans.
One we see a lot is condominiums. One would think that it is pretty straight forward, and that any lender can lend money for a condo purchase – not so. A lot of condominiums allow rentals or have allowed rentals in the past. If the ratio of owner-occupied to tenant occupied is too high, some lenders can’t or won’t lend the money to purchase that unit, whether or not you, the Buyer, is buying to live in or rent out.
When we have a Buyer that has already talked to or chosen a lender prior to meeting with us, we ask specific questions to make sure that is the right fit for what they are trying to buy. You would think that loan officers would ask pertinent questions on the front end, but not all of them do, or Buyers aren’t quite sure of what they want in the beginning stages. We have had far too many bad experiences with lenders that promise the world but don’t deliver. We’ve also had many Buyers disappointed and incur extra expense because their closing date had to be changed because the lender did not get the loan processed in time. Realtors can do their best to manage the process and make sure the lender is on notice to get a condo questionnaire, any HOA documents needed and order the appraisal in time, but sometimes that is not enough and balls get dropped.
You don’t want to have all your belongings in a truck at the title company only to find out that your lender forgot one crucial piece of information and now can’t provide the money for you to purchase your dream home (yes, it happens). It is always your decision as to who you use for a loan, however, your Realtor will have advice based on your particular needs and the property you are looking to buy. So, listen to those that do this on a regular basis, not just once every 5-15 years. Use your Realtor’s experience to help guide you. Their job is to help make the transaction go as smoothly as possible and help you get in your new home right on time. Lastly, don’t let a low rate make you starry-eyed. There are a lot of other fees involved so make sure you’re comparing apples to apples and make sure the lender you are considering can do the type of loan you want for the type of property you want.
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur babies, Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.