Pre-Approvals and Rate Shopping
Avoid using online approvals and only apply with a few lenders. You want an actual loan officer to review your info and shopping too many lenders is a red flag. You also want to avoid any websites that say they will find you the lowest rate because those companies are just selling your information back to the lenders.
Start researching lenders by looking up reviews and looking for patterns of what real customers are saying about their experience. It is also a good idea to look up information on the company’s profit margins and if possible, how much they are making per loan. Next start calling a few lenders and ask them questions before you give them any information and make sure they treat you well in the beginning. Find out who your loan officer would be because they are not all the same and then look up reviews of the individual loan officer. Make sure that they are going to be available to you.
Once you have your pre-approval letter make sure they actually pre-approved you because some lenders will just hand out the letter and never pull your credit. You will want to ask if they pulled your credit, reviewed your documents, and if you are DU (Desktop Underwriting) eligible. Remember that you cannot lock a rate without your credit score being run.
Send Documents to the Lender ASAP
The moment your contract is accepted is when you should rate shop and decide quickly. Appraisals are backed up, so you want a lender that is ordering the appraisal day one especially if you are closing in 30 days or less. Make sure to review disclosures and get those back same day if possible and get homeowners insurance quotes right away.
In terms of buyers, it is going to be more competitive than ever, which has been driving up prices and forcing Realtors to get creative with offers, but you still do not want to overpay. Rates are continuing to stay low and more people are looking to get into a house this year, but lenders are seeing a trend of low appraisals across that county including in new construction homes due to prices moving up too quickly before the market has a chance to correct. Buyers should be focusing on appraisals this year and you may even want to order an appraisal before submitting an offer in some cases.