When you make the decision to search for your first home or your next home, do not underestimate the importance of your lender partner. In the time I have been selling real estate, I have never had so many clients focus on the interest rate as a key factor in their decision to buy. I find this confusing because people don’t or shouldn’t buy a house because of the rate. They should decide to purchase a home because they want to start building a financial portfolio, move their family into a better neighborhood or school district, be closer to family or work opportunities.
But since 2023 the reason to purchase a home has become so much about the current interest rate. A lot of this is because the media is constantly creating fear around high rates and a housing crash. Another cause is many buyers rush into the home search process without establishing their team of experts: a lender and a real estate agent. It might also be due to how simple it is to find a lender on-line and get instantly preapproved based on the current (likely unattainable) interest rate. We are in a market where rates are very volatile and change pretty much every day and sometimes multiple times a day. Any lender who quotes a rate over the phone without doing a deep dive into your finances is doing you a disservice as they will always quote the lowest rate possible, one that most likely you wouldn’t be locking in at, which may set you up for disappointment or shock when you find a house and the rates have changed.
There are over 30 factors that go into determining a client’s rate and basing your search for a lender solely on a rate or costs quoted over the phone not only makes “rate” the focus, but it turns your lender into a commodity rather than a partner. Choosing your lender partner should always be about the level of experience and financial guidance the lender offers, the client care experience, the ability to execute quickly, and the reputation of that loan officer in the community.
Buyers need to spend the time to establish a relationship with a lender and focus on their true WHY for wanting to buy. Of course, interest rate plays a key role in your buying power, but a lender that understands your goals and finances will educate you on the loan options that will work best to achieve your goals.
Call me: 785-766-4829
Email me: kdavis@askmcgrew.com