Buyer Money Saving Tip #1

One of the first things that you, as a home buyer, will need to do in the home buying process is to choose a lender for your mortgage loan.  Katy Family Homes first recommends  that any buyer should be willing to "shop" around their loan.  It may take a little effort and time, but it is well worth the inconvenience.  There are many different  loan officers that work for mortgage companies and they will compete for your business.  Competition by them for your business means good things for you.  Namely, it saves you money. 

Do not be afraid to let the lenders you are working with know that you are shopping the loan for a better deal.  If they know this up front, they will often times be able to get you a better deal. 

Here is how it works:  We recommend that all of our buyers be pre-approved before we begin looking at homes for sale in Katy, TX and the surrounding areas.  To accomplish this, a home buyer only has to call up a lender and let him or her know that they want to be pre-approved for a mortgage loan.  The lender will ask you a few simple questions and then, based on the information that you give, will write you a nice pre-approval letterto use to pruchase your new home. This is only a pre-approval, not a formal application, and is not binding to you in any way.  However, this does open the dialogue between you and the lender to discuss your wants and needs for a home for sale and to ensure that you can afford the mortgage payment.  This is all valueable information. 

Once Katy Family Homes finds you a home on the Houston real estate market, then it is time to start the loan competition process.  At this point, you will want to call the lender and let him or her know that you have found a home for sale in West Houston and would like to work some numbers.  Ask them to give you a "GFE" or Good Faith Estimate, preferrably in the form of a HUD-1.  This will allow you to see all of the fees and charges that you will be responsible for in both your mortgage payment and closing costs.  You can see the lender fees, origination fee, taxes, title fees, etc..  Ask them to be sure and include ALL fees that they will be charging so that there are no surprises when the title company closes your home purchase.  Now, here is the tip.  Once you receive this HUD-1 form from you lending officer, you need to fax, or scan and email, it to another lender to see if they can beat the price.  You are trying to get three things: a lower interest rate, a lower monthly payment and lower total fees paid at closing. Ask the new lender for a HUD-1 GFE also.  Now you have two forms to compare side by side.  Katy Family Homes recommends that you call and shop at least three lenders to ensure the best price.  Do not be afraid to ask each lender about any fees, charges or interest rates that do not seem in-line with the others.  Let them know they are higher.  Be upfront and honest with all of them so that they understand you are looking to save the most money on your mortgage loan. 

This process allows you to get better pricing but it also allows you to see which lender is willing to work with you.  You will find out a great deal about each of them.  You can see their communication skills, work ethic, integrity and expertise so that once you decide on the lender you want to use, you will have mortgage officer you trust that best matches you and your needs. 

Don't worry, Katy Family Homes will be there throughout the entire process with you to help you feel at ease and knowledgable.  Buying a home for sale requires expertise, but is something that we can do together with as little stress as possible.  Remember, get the HUD-1 GFE and compare prices!