When Buying a Home, Find a Lender First and then a Loan

When Buying a Home, Find a Lender First and then a Loan

Posted by Jenny Kerr on June 15, 2011 in Bright Future, Empower Yourself

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Buying a home can be an exciting time. Walking into your dream home and knowing it could be yours is a great feeling! What most people forget to consider is how much money can be saved just by shopping around for lenders. It’s an oft overlooked fact, because the buyers are so excited about the new home — but shopping for the right loan really can add up to big savings.

In my experience as a loan officer, I saw this a lot with new homes.

The buyers would get so caught up in the home-buying experience, the loan was the last thing on their mind. They left it up to the realtor to use the lender they preferred. By doing this, you are not always getting the best deal. The realtor will inevitably be more interested in getting the best paycheck, not in you getting the best deal.

I cannot spell this out clearly enough: Your realtor, agent or broker is not obligated to get you the best deal on your loan unless they have contracted with you to be your agent.

If you are in the market for a new home, the best thing to do is shop around before you find your perfect home. Talk with your bank or credit union — not PerkStreet, since they don’t offer loans — and find out the average closing costs and what the current interest rate is. When you find a lender that meets your needs, start the pre-approval process. When you find your perfect home, you will already be pre-approved and you’ll know you have the best deal.

In the grand scheme of things, a couple of thousand dollars may not seem like much when you are talking about tens of thousands of dollars that will be spent on a new home.

Consider this: If you were buying something small and the price was reduced by $100, you would jump at the chance to buy it, right? The same goes for big purchases. While a couple thousand dollars may not seem like much when you stretch it out, why would you want to pay more than you have to?

This lesson can also be applied to other purchases. Before making your next big purchase, do your homework to make sure you are getting the best deal. Don’t wait for anyone else to do it for you!

If nothing else, remember the rhyme in the title of this blog post to be sure you save money.

What is your best tip for getting a great deal on a home? Share it below to keep the conversation going.

Jenny Kerr is a PerkStreet customer and midwestern gal who loves yoga, her Blackberry, makeup and Apple TV. She’s a personal finance blogger at TheJennyPincher, where she shares financial tips for single ladies. Jenny is a former banker and currently works as a consultant during the day. She’s also taught budgeting in a classroom setting.