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Bank or broker? This is the first question you should ask yourself. Which you go with will depend on the kind of relationship you have with your bank, and any referrals given to you by family or friends. If you know someone who recently bought a home, ask their advice. They may be able to recommend a great loan officer, or tell you which companies they didn't go with and why. If you've been with your bank for a good amount of time, are pleased with the level of service you have received, and they offer good rates, that may be an obvious route to take. It never hurts to also call around town to several different banks and brokerage offices just to compare rates and customer service experiences. Your realtor is also a great resource, and can recommend a lender with whom other customers have had a positive relationship.
|This is where you want to be on your mortgage!|
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Once you have tidied up your finances and selected a lender, you can begin the pre-approval process. They lender will typically pull your credit score and do their calculations and call you back in a few days with news on how much loan they can offer based on your credit and down payment. With that information in hand, you and your realtor will have a better idea of not only what price range of properties to look at, but what mortgage payment you can comfortably handle each month, and how much you can afford for any possible repairs, renovations, taxes, or other post-purchase costs. By seeking pre-approval, your ability to offer and close will also be more streamlined. You'll reduce the risk of missing out on a must-have property to a buyer with faster access to capital, or time spent negotiating and counter-offering with the seller while also trying to wrangle with a bank or broker.