How to Select a Lender for Your Home Purchase

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How to Select a Lender for Your Home Purchase

 A huge mistake that buyers make is working with the wrong lender for their home purchase. Buyers often fall into the rabbit hole of rate shopping and get hyper-focused on finding the lender who will offer them the absolute lowest interest rate. This is totally understandable- of course buyers want to save money and get a great rate and we do advise our clients to speak to a few different lenders so that you can compare numbers. But, the rate is not the only factor that buyers need to consider when selecting a lender. You need to make sure that your lender also provides the level of service needed to successfully help you close on your purchase.

Are they reachable on evenings and weekends? Let's say you tour your dream home after work on Friday and offers are due Sunday morning, but we can't get ahold of your lender for an updated pre-approval letter and so you're not able to submit a complete offer package. The sellers might decide to accept an offer from another buyer whose lender was available over the weekend.

How quickly can the lender be ready to close? In Northern Virginia, about 30 days between an offer being accepted and the sale closing is normal. A super low rate won't do you any good if the lender needs 60 days to close and the sellers of all the homes you like want to close sooner.

And most importantly, can the lender actually deliver on what they promise? If they tell you that "everything is golden, your file is tight, they can close in 3 weeks don't worry about it", and you base your offer on that information and then they can't perform, then you could not only lose out on your new home but could possibly be responsible for financial damages to the seller if you end up in breach of contract.

A lot of buyers are surprised to learn that lenders aren't held accountable for not meeting deadlines. They will not reimburse you if they end up taking two weeks longer to close than they said they would and you end up having to find alternate housing because you already gave notice at your rental or you have to pay an extra fee to reschedule your movers. It doesn't feel fair, but unfortunately, that's the way it is. So when selecting a lender for your home purchase, you are looking for the perfect combination of good rates and excellent service. 

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