Step 2 | How to Shop for a Mortgage | How to Buy a Home | Murrieta Ca

Should you shop for a mortgage before you shop for a new home? How do you shop for a mortgage exactly? Today I’m going to tell you how and give you some tips on how to make the process as easy as possible, and we are starting right now. 

Hi, Jessica Genung here from Realty One Group Southwest. If you haven’t yet, please consider subscribing to my channel right down here. I post new videos every week talking about everything you need to know to buy and sell property in the Murrieta/Temecula Valley. This is the second of eight steps of my How to Buy a Home series. So let’s get right to it. 

Here is how to shop for a mortgage. Tip number one for how to shop for a mortgage is to consult with a GREAT lender. How do you find a great lender? You need to get a referral. You could ask your friends or family or somebody who’s recently used a mortgage broker that they had a great experience with. 

Or better yet, you could ask your trusted and experienced Realtor. Your trusted Realtor is probably the best person to get a referral from. Just like Realtors market and advertise to earn new business from folks looking to buy and sell homes, mortgage lenders often market to Realtors to generate business opportunities. Good realtors then pick the best lenders available in the market to service our clients. We’ve had experience with the good the bad and the ugly. 

Our recommended lenders are the most important partnership in our business. Your mortgage lender needs to be VERY experienced. Buying a home is one of the largest financial transactions in your life, usually the biggest for most people. In my last video I talked about how your realtor needs to have the heart of a teacher. The same applies for your lender. You need to choose somebody who is patient, who enjoys educating you on the home loan process and has a passion for giving you great service. 

Tip number two: consider a lender that can submit you into underwriting early in the pre-approval process. This can be a game-changer. Even if preliminary, this can give the seller of the home you’re purchasing, as well as the agents on both sides of the transaction, more confidence and certainty that you’re going to be able to close on the home. 

Underwriting approval is a step beyond the typical pre-approval process. This means they’ve examined the buyers qualifications much more thoroughly. They’ve seen bank statements, they’ve seen pay stubs and they pulled a credit report as well. 

Here is a real-life example of how this works. Earlier this year for my listing in Murrieta we had multiple offers. We were considering an offer that was the best offer (it was only the best offer by a little bit) but the credit score was not very good. It was…actually it was bad. 

It was in the high 500s, it was like 590 or something like that. It’s at the bare minimum to you know be able to get an FHA loan typically. The financial and credit strength of a purchaser is very important when considering an offer, especially in a multiple offer situation. This buyer’s lender assured me that his client had already been through underwriting, so he pretty much had loan approval. 

All he needed was a purchase contract and an appraisal and they would be able to fund the loan. He came through on that promise we closed in 21 days and we had a very happy buyer and sellers. Tip number three: get the full picture in writing. There are many different loan products to consider. You have conventional financing, FHA, VA, adjustable rate mortgages, just to name a few. 

A great lender will go over all of your options with you and let you know which loan they think is going to be best for your situation. They should provide you with a detailed breakdown of fees to help clarify how much your new monthly payment will be and an estimate of how much you’re looking at in closing costs. 

Full transparency is what we’re looking for. Here is an example of the value a great lender can provide you. This is from this week actually. My buyer is using my preferred lender and he’s been provided with this loan comparison chart. 

My client is trying to decide between an FHA and a conventional loan – trying to decide which one’s going to be best for him. So my lender has provided to him a side-by-side breakdown comparing apples to apples. You can see conventional on the left and FHA on the right. The purchase price is the same, the down payments the same and if you scroll down a little bit you’re going to see line items of the closing costs. 

Now these are just estimates. Some of these figures can vary. This information gives you the total estimated cash they are going to need to close. Also down in this last section, you can look at what your interest cost is going to be, as well as your mortgage insurance, and that can help you compare the two loans as well. I hope you found this video helpful and learned how to shop for a mortgage and how a lender can make all the difference in insuring you have a great home buying experience. This is step 2 of 8 in my series on how to buy a home. 

If you would like a copy of the rest of the steps, which I will be discussing in the upcoming weeks, but I could send you a copy of the roadmap of the steps right now if you would like. I’ve included a link in the description below. Thanks so much for watching my video and don’t forget to subscribe right down here. 

Bye!