Unless you are blessed enough to be making a cash purchase of your new or resale home, dealing with financing is going to take up one of the biggest chunks of your time during the home buying process. The first thing you need to understand about financing is that whichever lender you choose is following a STRICT protocol of rules set forth by the U.S. government and the Federal Department of Housing. Therefore, they are required to collect all sorts of extensive and redundant information from you in order to fulfill their obligations in considering whether to fund your loan. It’s helpful to go into the financing process with this knowledge so that you don’t feel a little bit “combative” or frustrated with your lender – they’re just doing the impossible job that is required of them.
It is a good idea to make the time to research both lenders and title companies before moving forward with the pre-approval process of your loan. This time can save you money and can also give you a feel about the type of company or loan officer with whom you are going to work. Click Here to Learn More About Choosing Your Lender.
Getting pre-qualified and getting pre-approved are two different processes. Overall, your financial situation needs to be at a certain level before you can even begin to consider buying a home, so a fact-finding appointment with a local lender might be a wise choice in learning about the qualifications that need to be met to begin the financing process. Click Here to Learn More About the Pre-Approval Process.
After you spend hours / days / weeks (well let’s hope not!) tracking down all of the paperwork required by your lender for your financing, a good rule of thumb is to make copies of the entire stack of paperwork BEFORE you send it to your lender. From talking to closing agents, I have heard many of them say that their clients would have to send and then resend their paperwork 2 or 3 times because the lender “lost” the paperwork or the loan was transferred to another department or loan officer which did not get all of the paperwork. If you have all of the paperwork copied and stored, all you have to do is to go get it from your file and fax, mail, or e-mail it out to the lender again – just a “trick of the trade!”
Another good rule is that the squeaky wheel gets the grease. If you are not hearing from your lender on a regular basis, don’t assume that they are working hard and steadily on your file and will call you with a closing date “any day.” The fact of the matter is that lenders are super busy trying to fulfill all of those pesky obligations I mentioned above and may have gotten swamped with their workload. If you are “top of mind” on the phone with them on a regular basis, you have a better chance of getting your financing completed in a timely fashion. I am not saying this is a guaranteed strategy, but it’s definitely worth some followup.