CALLER: Hey Shannon. We want to buy a house, and your former client Sarah told us to call you, that she had a great experience with you.
SHANNON: Awesome! I love Sarah, and any friend of hers is a friend of mine! Any idea what you are looking for? Do we get to find out together?
CALLER: Well, we are looking for a house with acreage, around $400,000. Definitely need a garage.
SHANNON: Cool. I think we can do that. How are you going to finance? I mean, do you have cash? Will there be financing involved? How will we do it?
CALLER: Oh, we need to get a loan. That’s okay, right?
SHANNON: Of course! Tons of folks get financing for their homes. Not very many people have that kind of cash. I know I don’t! So who is your lender?
CALLER: Oh we don’t have one. We got our numbers from a mortgage calculator online. We might work with our local credit union, but we are not sure. Also, my brother’s wife’s cousin is a lender in Ohio. We also might work with him. That’s okay, right?
Above is a very common conversation in my world. Probably once a week or so.
There are awesome aspects to it! I love referrals, of course. They are the best. (Thank you!)
But there are aspects that need a bit of help and guidance, too. And that’s why I’m here. Happy to point folks in the right direction.
Here’s the thing. The internet is wacky. It’s cool but it’s wacky. And it will make people think that they have all of the knowledge that they need to make really important decisions.
In lots of cases, that’s not true, though. Most cases, really. Especially big cases – with big decisions attached!
Internet calculators can’t check someone’s credit snapshot. They can’t verify income/employment. They can’t find the best available loan products for price/condition/personal desirability. So when a person uses those to make preliminary decisions, they are already potentially way off base. Even knowing what interest rate that someone will qualify for is a process based on their personal snapshot – so whatever autofills there may not even pertain to the person doing the clicking. And a point or two can make a substantial difference in monthly payment.
And that’s what we really care the most about. The monthly payment – that check that gets stroked every month, right?
Lenders have been notorious for quoting best case scenarios to folks, and then not explaining how it breaks down on a monthly. This is not a functional way to make decisions, so we need to ask them to re-interpret for us, taking into consideration taxes, hazard insurance, and Private Mortgage Insurance (PMI). On a monthly basis.
So the conversation continues with the $400,000 caller.
SHANNON: Okay – so tell me a little bit about yourself.
CALLER: Sure! I’m married to my fabulous wife, and we both have great jobs. No kids yet, but we are having three. We are definitely having three.
SHANNON: Awesome. Think one of you might like to stay home with those kids for more than a few weeks?
CALLER: Oh yeah – we totally plan on that. It’s very important to us.
SHANNON: Excellent. So I wonder if we should be looking at a place in the $250-300,000 range. What are your thoughts about that? Prepare for the one-income lifestyle for a while, huh?
CALLER: Wow – I hadn’t thought about that. Guess I was just so happy that it looked like we could afford so much!
So right out of the gate, having a true snapshot of that ongoing financial commitment is crucial. See what I mean?
This is why it’s very important that the first thing we do is get you to a trusted lender. Someone who knows their stuff, and can look over your situation with an eye for any potential snafus, as well as hope for getting us where we need to be in that home purchase.
And that couple who is now going to spend less? My job is finding them the most smoking-hot deal around – and for that price that will keep their money in their pocket as much as possible so that they can live better day to day. Homeownership can be designed as a way to create freedom, not worry and stress.
By the way – if this scenario above is not you, never fear. Just because it’s a common interaction doesn’t mean that this is the only snapshot of our clients. Everyone needs a place to live! My job is helping you find the right one that suits your special, location, and financial needs. It’s fun!
Thank you for inviting me be of service, and trusting me for so many years. Here’s to many more!