Real Estate Matters
By Elisa Jo Eagan
While real estate agents have a great deal of practical experience to offer in the finance realm, they are not mortgage lenders. That means they are not able to give you specific advice about which mortgage to choose or how you should finance your home purchase.
However, real estate agents are great connectors and can put you in touch with a number of professionals who can help you through the process. They can also help you better understand and evaluate your options and make decisions along the way that work for you and your family.
Since the financing of a home purchase is generally the most complex element of the transaction, it’s important to discuss your finances and financial needs with your real estate agent upfront. Below are a few questions you might ask your real estate professional, along with some insight into their possible answers.
Do you have any lender referrals for me?
Your real estate agent or broker probably knows almost everyone in your market, including a variety of excellent lenders and mortgage brokers. They will likely refer you to several so you can compare options and products.
How should I choose the right lender?
Your personal financial situation will play a big role in determining the right lender. Some specialize in first-time homebuyers, buyers with poor credit, or self-employed buyers. Talk to your agent about your specific needs to find the best fit.
How early should I start preparing for the mortgage process?
The answer is early, but not too early. While it’s always a good idea to pay down debt and improve your credit score, avoid applying too early since rates and options can change over time.
How do I find out how much house I can afford?
You’ll want to undergo either pre-qualification or pre-approval.
Pre-qualification is a quick estimate based on the information you provide to a lender. Pre-approval is more detailed and involves submitting documents for underwriting. A pre-approval letter strengthens your offer when buying a home.
What should I be careful about during underwriting?
Keep your financial history clean. Avoid having insufficient funds and opening new credit accounts. Consult your real estate agent before making major financial or job changes.
What if I need to sell one house before buying another?
Your real estate agent can connect you with lenders specializing in loans for this scenario, or help with a 1031 tax exchange. They’ll guide you through pricing your current home and syncing closing timelines.
Can I get help with closing costs?
If you need help, your agent can structure your offer to ask the seller to contribute. This may involve offering a higher sales price to offset the difference.
Are there grants or programs for down payment assistance or closing costs?
Your agent should know about local, state, or federal programs, as well as builder offers or employer-based assistance.
Can you explain any contingencies related to financing?
Your agent will outline options like financing and appraisal contingencies. These impact both the strength of your offer and your protection during the process.
Are there alternatives to traditional mortgage loans?
Discuss options like seller financing or 1031 tax exchanges early on. Your agent can connect you with professionals to explore these alternatives.
Remember, your real estate agent or broker has a fiduciary duty to protect your financial information. Any details you share will be kept confidential. Use their expertise to better understand the process and make informed decisions.
Attention police officers and firefighters
Ask about the New Jersey Police and Fire Homebuyer Program. Our local heroes receive a major discount on their interest rate when buying a home. Mortgage loans are available with an interest rate of 5.04% and you don’t need to be a first-time homebuyer. Thank you for your service and for protecting our communities. Get pre-qualified today.
For More Real Estate Questions, Information and Advice Contact Elisa Jo Eagan “The Real Estate Godmother” (609)703-0432 and Remember…”There’s No Place Like Owning Your Own Home!”
