One of the most common questions I get from home buyers is; “what do you recommend, should I go with a mortgage broker or should I go with a bank for my home loan?”
"Also, is a mortgage broker the same as a loan officer?"
"Is one better than the other?"
All good questions!
Although yes, finding yourself a good Realtor is vital to ensuring a smooth home purchase, a great mortgage professional is equally important to ensuring a successful closing.
During the home purchase process, you will spend way more time with your Realtor, driving around, looking at homes and a good personality fit helps. For your lender, however, you might see them once or twice, or maybe even never, through the whole purchase. However, they will be busy in the background doing their due diligence to ensure your financing is being taken care of.
For this article, I teamed up with mortgage expert Luke Skar of Inlanta Mortgage and MadisonMortgageGuys.com to help explain the difference between the two main sources for mortgages. We will look at the differences between mortgage brokers and banks, the pros and cons of each and just as importantly, how to find a good lender.
I’ll cover things from the Realtor/home buyer perspective, while Luke will go over the different types of lenders and the pros and cons of each option. Both of us will give you our opinions on how to find a good lender.
From the Realtor's perspective.
The importance of a good mortgage professional:
Be it through your own natural, inherent tendencies or through parental coercion, the usual human progression is go to school, get a job, get married, have kids..... and buy a home (actual order may vary).
The urge to buy a home can be pretty strong. People get tired of renting, putting up with thin walls and noisy neighbors and feel like they are throwing money down the toilet. Potential buyers can feel like they are getting left behind by the market and if they don't buy NOW, they will be priced out forever. And some people want to buy just because that's what you're supposed to do.
However, for some people, buying a home might not be a good idea for the particular time they are in in their lives. There's more to owning a home and there's nothing wrong with renting. At certain times, buying a home and taking on all the commitments associated with home ownership are best deferred to when you are really ready to make the leap.... both emotionally and financially.
NOW might not be the right time and later just might be perfect. And sometimes, maybe you shouldn't by at all unless you are willing to look at the concept of home ownership differently?
If you fit one of the following categories, then maybe step back and reconsider your situation.
All you see are dollar signs and a quick profit
In a hot real estate market, home prices go up and up. You think that if you buy a home now, it will automatically go up in value and you will make a tidy little profit in a couple of years.
NOBODY but nobody knows...
Buyer #1: Wow! Look at those expansive, unobstructed ocean views!
Buyer #2: Wow! Looks like that thing is ready to slide into the ocean.
Different buyers will view homes on a steep hill with different perspectives. To some, a home sitting on a steep hillside is a thing of beauty and will love how the land drops below them. To others, it’s a disaster waiting to happen although the home might have been sitting there for the past 100 years and survived the occasional earthquake.
Homes on steep slopes comes in all shapes, sizes and locations. From packed-in tight San Francisco condo buildings, to new houses on man made terraces bulldozed into steep terrain to million dollar Seattle homes overlooking the Puget Sound clinging to a forested hill trying to eke out every last inch of that spectacular view.
As with all styles of homes and the types of land they are located on, there are both pros and cons. But when it comes to homes on steep hillsides, a buyer has to take into consideration some additional elements when weighing up if a particular home is right for them or whether they should keep looking.
So, is buying a home on a steep slope a good idea or should you buy a home on something a bit more terra firma-ish?
Note: If you live in Florida, this article will be of no use to you whatsoever unless you are relocating soon.
The advantages of owing a home on a steep hill
Potentially, but not always, you will have unobstructed and expansive views of sunrises or sunsets, cityscapes or rural isolation as far as the eye can see. Since the land drops below you, there will not be a home right in front of you, blocking your coveted view. You might be looking at someone else's roof top but you can still see the...
"It was a dark and stormy night!"
Call your Realtor now and tell him to grab his gumboots because you want to go see some homes in the morning.
Sure, summer is a great time to go see homes when the sun is shining, everything is in bloom and homes look their best. However, personally I think the best time for a buyer to purchase a home is during the dark and dreary, miserable and wet months of the year. A good continuous dose of rain can help reveal a whole host of issues that might remain hidden, or at least a lot harder to find, during the drier spring and summer months. Plus there's a lot less competition for homes during those times of year.
Rain will help both the buyer and their agent when they are out looking at homes and considering making an offer. Also helps your home inspector look really competent.
For non-Seattleites, it's probably hard to believe that from about mid June through mid September, we usually get next to no rain and have one of the best rated summers in the US (we like to keep that quiet).
We don't get the heavy lightening storms and downpours or hurricane rains some other parts of the US enjoy during the summer months. But come fall and winter...hold onto your Seahawks hats...you'll have the urge to build an ark in the backyard just to be on the safe side. While writing this piece, we had THE wettest October on record. And to think I moved from Ireland for this!
On the upside, all that rain, wind and moisture is a great little helper when looking to buy a home. If you can time it for when a Pineapple Express is barreling in from Hawaii all the better. But regardless of which part of the US you live (including desert monsoons) rain and his buddy...
Recently I listed a home which received multiple offers on the offer review deadline. Two of the 8 offers were actually below asking price and with the full spectrum of buyer contingencies. After the sellers had picked the winning offer, I then set upon one of the less appealing aspects of real estate... calling the agents whose buyers didn't get the home. Yes, text or email would be easier but since the agent and their buyers went to the trouble of making an offer they deserved a phone call.
When I asked the agents for the low ball offers…”Why did your buyers make below list price offers knowing that there were already a bunch of other offers?"
The agents replied: “I wanted the buyers to discover for themselves how strong a sellers’ market we are in right now, plus we got to practice writing up an offer”.
Some home buyers have an HGTV inspired impression of finding and purchasing a home. “Let’s go see 3 homes and then we can decide which one we want to buy”.
Ah yes, fantasy real estate land where everything is staged and not just the homes.
Buying a home is not like purchasing a TV…get to check out multiple models, then go home for a week and think about it, sleep soundly knowing that the same TV will be there in a week if you decide you want to buy it. In a strong sellers’ market or even a balanced real estate market, luxuries such as time are not always available.
As a Realtor, you have to decide whether to let home buyers discover for themselves what the real estate market is really like or, do you give it to them straight on day zero and risk never seeing them again as they run screaming into the horizon?
Note that this...