Who do I talk to about buying a home for the first time?

As a hopeful potential buyer, you may be wondering, “who do I talk to about buying a home for the first time?”

It’s an important question, as finding the right professionals for your homebuying team is key to a smoother, more enjoyable process.

Over the coming days, weeks or months, you’ll need to seek out a number of different professionals. This might include:

A real estate agent
A home finance professional
A home inspector
A home appraiser
A homeowner’s insurance agent
A representative of the title company
A representative of the loan servicer
And more

It truly takes a village…

But, with so many professionals to track down and vet, you may also be wondering who you should find and work with first. Our suggestion? A knowledgeable and experienced mortgage professional – and a mortgage broker might be your best bet.

What is a Mortgage Broker?

Mortgage brokers are home finance professionals. As such, they’ll play a key role in your homebuying process.

Mortgage brokers shop around for their clients, comparing many different loan options at a multitude of lending institutions. Because their work involves this degree of comparison, they may be able to offer their clients more favorable terms, rates and mortgage products.

Keep in mind that mortgage brokers are fundamentally different from mortgage bankers, who are employees or representatives of a specific lender or bank. These professionals are unable to shop around in the same way, and only have access to programs offered by their banking institution.

While each type of home finance professional comes with their own unique set of pros and cons, we recommend at least speaking with a mortgage broker at the start of your home search, even if you do plan to use your local bank to obtain a mortgage loan. This is because nearly all homeowners can benefit from at least exploring their options.

Why Should I Work with an Mortgage Broker First?

So, what benefits can come from working with a mortgage broker at the start of your homebuying process?

Here’s why you should connect with an mortgage professional before seeking out a real estate agent or otherwise moving forward with your home search:

To Figure out How Much You Can Afford

While shopping for a new home can be fun, you can’t make the purchase without the actual funds. There’s nothing more heartbreaking than falling in love with a home only to realize you won’t be able to afford it. Finding and working with an mortgage broker before the fact can help prevent those painful experiences, while exploring as many home loan options as possible (thanks to their access to hundreds of mortgage products).

Mortgage professionals look at several different factors, including:

Your credit score
Your debt-to-income ratio
Your down payment amount
And more

These factors can help determine approximately how much you can afford, which will then guide your home search process.

While some buyers choose to use various online mortgage calculators similarly, these tools can’t always be trusted. This is because they often take into account only principal and interest amounts, which probably won’t be the only expenses you’ll have each month. Mortgage professionals know to factor in additional hidden costs, like private mortgage insurance, homeowner’s association (HOA) fees taxes and insurance and more.

This will give you a significantly clearer and more accurate prediction, making searching for a home that is actually in your price range much smoother and more enjoyable.

To Explore All of Your Loan Options

As mentioned above, mortgage brokers are committed to finding the loan type or program that best suits each individual client.

If you choose not to speak with a mortgage broker and, instead, visit your local bank or credit union, you’ll be limited to what that institution has to offer. This could include interest rates, fees, dates of funds disbursement and more. Any one of these factors could misalign with your goals or best interests, potentially costing you.

When working with a mortgage broker, however, you can explore all of your options in-depth. This is because your broker can and will shop around on your behalf.

For example, perhaps you’re a shoe-in for a USDA loan, one of the most sought after home loan programs on the market. This might mean that you could pay 0% down and take advantage of highly competitive interest rates. While the bank may not mention the fact that you qualify, a good mortgage broker is sure to find and present the very best options for your specific situation.

Or, maybe you’d like to secure a home loan with less-than-stellar credit. The bank might deny you outright if you don’t meet their blanket requirements. A mortgage broker, on the other hand, could find federal, state or local programs you could qualify for. They may even be able to offer guidance and insight on raising your credit score before purchasing, if necessary.

Essentially, whatever the case may be, working with a mortgage broker means far more options.

Perhaps the standard loan program at your local bank is best for you. But, then again, perhaps not. There’s no harm in at least exploring!

To Get Pre-Qualified or Pre-Approved

Speaking with a mortgage broker early also means that you can start your home search with a pre-qualification or pre-approval letter in hand. These documents both signify financial readiness to purchase a home and can help you stand out in a sea of fellow potential buyers.

Pre-qualification or pre-approval is essentially a mortgage company’s estimate of the amount you’re likely to qualify for based on provided information, like your credit score and income. Think of it as the amount that a hypothetical borrower with financial stats similar to yours could qualify for.

Both pre-qualification and pre-approval letters are helpful when home shopping because they provide proof of your ability to buy. For example, without a pre-approval or pre-qualification letter, any buyer could make outlandish promises about their financials. If a seller were to bank on those promises, and they were to fall through, the entire deal would fall apart. Pre-qualification and pre-approval help back up your claims.