Most lenders don’t bite. At least none of MY lenders. Point is, these are people to whom you should definitely have a conversation if you are in the real estate world. Listen, things are changing in the real estate world (can you say interest rates?), and lenders change their programs to align with current conditions.
I always, ALWAYS, encourage my clients to talk to their lender FIRST. Why? Because you don’t really know what you can afford, for one thing. Second, you don’t really know your credit score, most likely, because the ‘deep dive’ is what the lenders do and they find EVERYTHING.
Point is, there are some new programs out there that might get you enthusiastic again, out of the disappointment status you started feeling when rates went up. Adjustable rate loans are back and don’t wrinkle your nose: My first mortgage was adjustable rate, and I could refinance any time after year one. Which I did. One hundred percent financing is also back ‘in vogue’, meaning that the pendulum swing is enabling buyers to have a bit of leverage again (Thank goodness). And USDA limits are different now; the household income is higher, which helps. There’s a new ‘self employed’ loan out there, which helps those of us who itemize and claim deductions. The deductions lower your ‘income’ according to the algorithm. Now, we self employed folks can now get a mortgage based on our actual income, rather than what the tax form says. It’s not a no-doc loan, but it uses tax returns. That’s all I know; consult your lender.
Thing is, there are OPTIONS, and you should explore them. And different lenders have different products, so do some homework. Tell them what you want to do and let them tell you what program they have that will help you achieve that dream. I tell my clients not to be intimidated by lenders. They are making money by having you as a client, so act like it. Be as important to them as you actually are, and find out what THEY can do for YOU.
Online is NOT the best way, by the way. There, you are a number. In person lenders get to know you and how you operate, and they know your NAME. You can meet and talk about where you ARE, where you are GOING, and what you DREAM. Look a lender in the eye. Find one who has some battle scars, too. They know the lay of the land, and are very good at digging out that perfect product for you.
Establish a relationship with a good lender, because they are important to have in your sphere of influence when things change in your life. Plus, most of them are really nice folks. I’ve met some who are not, so be careful, be sure they are telling you the truth, and comparison shop.
Don’t be intimidated. They are people too.
And finally, you STILL have to prove you are able to buy before you make an offer. So just go, get that letter, know your options. After you talk to a lender, you will know how much house you can afford, thus avoiding looking at homes that are too small (maybe you can go larger), or looking at ones that are more than you can buy. Once you see them, others may seem disappointing.
I’m not a lender but I have some great lender contacts. I’m Brenda, a Coldwell Banker Advantage real estate agent and Realtor. Let me know if I can help.