Avoiding Financial Stress When Getting a Loan For Buying a Home


The first time you think about getting a home loan shouldn't be when you find the house of your dreams and you want to make an offer.  By asking the right questions, and knowing exactly what your needs are, Working with a great buyers agent, a great loan officer, you can find the right loan for you with the least stress. There are certain approaches that you can take while mortgage shopping that can cost or save you money.

It is still true that the better the qualifications you have, the lower your interest rate will be. However, there are mortgages available for almost everyone; it's the interest rates, points and the down payments that may vary.

Before speaking with a lender, think about your budget and know what monthly dollar amount you feel comfortable committing to. And also realize there are certain expenses that could go up as you become a homeowner.  There's insurance, taxes, home maintenance, and utilities), they must also be factored in when finding that comfortable number. 

Then,  when you discuss mortgage pre-approval with your lender, it is easier for you to determine the monthly amount and what value of home the monthly amount translates into. Do not put yourself in the position where you will be paying more each month than you intended simply because the dream home requires it.  Your dream home isn't your dream home when you're house poor (you can afford the house, but not to have a life).

Also, take a look at your credit score before you speak to your lender.  It can take quite a bit of time to rebuild a credit score to get the best possible rate if needed.  Know your score, know where you stand on the scale.  There are finance programs for most everyone, but knowing what tier you're in is helpful.  

Do your research on the types of mortgages available to you and find the one that best suits your needs. Different mortgage brokers have different programs and different specialties. There are a number of considerations to be made in terms of finding the best mortgage for each individual:

  • What type of market are you in? Are the interest rates falling or rising?
  • Do you want a fixed mortgage rate, where you will always know what your payment is going to be?
  • What of Are you comfortable with the explanations about the different kind of mortgage options your lender is explaining to you?  If it isn't something you understand thoroughly, it's not the program for you.
  • Have you found out about or been told about special financing programs available to you (i.e. first responders, teachers, VA loans, etc.)

You don't have to work with the first lender you speak to.  Find one who:

  • Explains things in a way you can understand
  • Offers programs that fit your life and lifestyle
  • Is someone you're ok with working with over this period
  • who offers tools to get the required documentation in a timely and easy manner.

A great buyers agent is also a great resource.  They are there to guide you through this process, have a fiduciary relationship to you, they are on your side and are generally paid by the seller.  Speak to your agent before you're ready to start the process and get a roadmap.  We sometimes work with buyers for months to years before they're ready to buy.  Your buyer's agent is a wealth of knowledge and advice.  Use them.

Buying a home is stressful enough.  For most, it is one of the largest purchases and financial decisions in their lives.  With some preparation, guidance, and tools, getting a home loan doesn't have to be a stressful experience.