One of the best decisions a potential buyer can make is speaking with a mortgage lender before considering making a purchase.  In many cases, this could be six months to a year prior to being ready to make a purchase.  In my experience, people delay reaching out to a lender until they have saved a sizable down payment and are ready to put an offer in on a property.  

An intelligent, strategic, approach to the home buying process can have a long reaching positive impact on your financial future.  It never hurts to gather information; you will then have a solid base to make informed decisions.   

Reputation is important
There are a couple of important reasons to speak with a reputable, local lender:

    • Without a thorough financial review and resulting pre-approval, you will not know what purchase price you qualify for.  This is a crucial first step to determine the range of prices you might afford when looking for a property. A reputable lender will be able to perform a professional review and give you objective information on what you can afford to pay for your purchase.
    • All purchase offers must be accompanied by a pre-approval letter from your lender stating the loan amount you are qualified for. While most experienced lenders can generate a pre-approval letter fairly quickly, an experienced lender will also advise you on what financial decisions can help you meet your home buying goals, and conversely, what decisions may harm your credit and therefore limit your purchasing power.
The hallmarks of a good lender are, first and foremost, someone you feel comfortable working with and sharing all of your financial information.  It may sound silly, but if you don’t feel at ease, ask for another referral.  I suggest interviewing two or three lenders and seeing who feels like the best fit.

Working locally
Many large banking institutions, like Bank of America and Wells Fargo, offer compelling rates, credits, and special discount programs. However, their mortgage business is only a small part of their overall operations and these organizations are interested in a high volume of transactions to justify their rates and discounts.  

The process of working with a large institution can be bureaucratic and onerous at best, and impossible to close financing at the worst.  As a result, I generally recommend working with a local lender whenever possible. There are multiple benefits of working with an experienced, local lender:

    • Local lenders are known within the community of realtors and offer credibility based on a history of successful engagements.  
    • They offer the highest level of service and are consistently responsive to both client, buyer’s agent, and listing agent, enabling the seller to feel confident about the potential buyer’s financial standing thereby increasing the odds of your offer being accepted.  
    • Local lenders have a network of experienced, local property appraisers familiar with the competitive East Bay real estate market, and are better able to manage your transaction from end-to-end to ensure an on-time close of escrow, and identify outside the box loan options.
Ultimately it is up to you to choose a lender with whom you are comfortable, but I urge all of my clients to compare options and look at the range of benefits that a local lender can offer before making a decision. While you may be offered better terms or a slightly lower interest from a large bank, in the long-term you will likely find that the local lender is more reliable, able to facilitate your purchase more easily with less work and frustration.  This results in a stronger offer and a faster close so you can quickly begin living in the house of your dreams.

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