Just like finding a great real estate agent, finding a lender you can trust is key to having a successful home-buying experience. While your agent will help you find and close on the perfect home for you, your lender is the person who makes all the important money and mortgage stuff happen so you can actually own the home. But not all lenders are equal, and there are some lenders out there that may take advantage of you. You want to ensure that you’re in a safe lending situation and are provided a good mortgage that you’re able to afford.
When you’re searching for a reputable, trustworthy lender, you need to make sure that your lender asks the following four questions:
1. Do you have a monthly budget and savings plan? Your lender should always ask about your budget and savings plan to make sure that your mortgage will fit into your finances. Without knowing about your expenses and how much you want to save, your lender won’t be able to know how much of a mortgage you can safely afford.
2. Do you have an emergency fund? You should have an emergency fund before buying a home, and a good lender will ensure that this is the case. Homes can come with unexpected expenses, and having an emergency fund will ensure that you’ll be able to take care of those expenses without getting into debt.
3. Do you expect any income changes in the near future? A good lender will make sure, to the best of their ability, that you’ll be able to pay your mortgage payments. They’ll do this by looking at your job history and asking about your future income. If you’re expecting any income changes, your lenders recommendations for mortgage options may change.
4. Are there any current financial concerns or issues you need help with? Your lender should help you sort out any concerns you have with your finances before locking you into a mortgage. By asking this question, your lender is making sure that you’ll be able to pay off your mortgage.
If your lender doesn’t ask you these four questions, chances are they're trying to take advantage of you. This is a major red flag, and if this happens, you should stop working with that lender and find a new one to help you finance your next home. I work with lenders all the time, so if you’re looking for a great lender to help you along your home-buying journey, send me an email and I’ll send you my list of trusted lenders.