Working with a Loan Officer Early Can Help You Reach Your Homeownership Goals
April Gould, October 25, 2024

Loan Officers play a pivotal role in turning house hunters into homeowners.
According to the 2024 Home Buyers and Sellers Generational Trends report by the National Association of Realtors® (NAR), respondents from all generations reported the first step they took in their home search started with looking at homes online. It’s not uncommon for potential buyers to find a home they like on sites like Realtor.com or Zillow, and then reach out to a real estate agent to assist in the search. However, one of the first questions an agent will likely ask a buyer is “Have you been pre-approved yet?”
Loan Officers play a pivotal role in turning house hunters into homeowners. First-time homebuyers might find the home buying process daunting, and are likely to have many questions about how the mortgage process works and the best ways to prepare for homeownership. Therefore, potential buyers benefit greatly from talking with a lender as early as possible in their homeownership journey.
Here’s how Loan Officers help make homeownership possible:
Assess Financial Readiness
By working with a lender as early as possible in the home buying process, borrowers will know if they are truly prepared financially for homeownership. Loan Officers will start by evaluating a borrower’s financial health, including their credit score, income, debt-to-income ratio (DTI), savings and other qualifying factors. They can help borrowers get a better picture of the true cost of homeownership by discussing insurance, property taxes, monthly mortgage payments, maintenance, and other costs to better prepare for these expenses.
By setting realistic expectations based on their budget, homebuyers are less likely to fall in love with a home only to discover they can’t secure financing for it.
Educate Borrowers on Loan Options
Loan Officers play a crucial role in educating borrowers about their loan options. Personalized service means explaining the specific details and differences in the types of mortgage products available, to ensure borrowers make informed decisions aligned with their financial situation and homeownership goals.
Some of the loan options include:
Conventional loans: A cost-effective way to borrow
FHA loans: Great for first-time buyers or those with lower credit scores
VA loans: For active duty service members and veterans
USDA RD loans: For rural properties
Renovation loans: Allow borrowers to roll renovation costs into the mortgage
Loan Officers also clarify key terms like interest rates, loan terms, and closing costs, helping borrowers understand the long-term impact of their choices. Through personalized guidance, they take the time to explain paperwork and the mortgage process so borrowers can move from application to the closing table with confidence.
Create a Savings Plan for a Down Payment
Many potential homebuyers may not realize that a 20% percent down payment isn’t required to buy a home. In fact, according to a report by USA Today, on average, first-time homebuyers put down just 8% of the purchase price.
By assessing the borrower’s financial situation and identifying the desired purchase price range and loan type, a Loan Officer can clarify approximately how much of a down payment is needed and help create a strategy for increasing savings. This personalized guidance helps borrowers set realistic savings goals and timelines.
Additionally, as experts in the mortgage industry, Loan Officers can provide information about state, local and national down payment assistance programs, grants, or gift fund options that may reduce the amount needed.
Strategize Ways to Improve Credit
For borrowers with low credit scores or high debt, Loan Officers can help craft a strategy to strengthen their creditworthiness by reviewing their credit report and identifying areas for improvement. This could include paying down debt, disputing credit report errors, avoiding new debt, or waiting until financial conditions improve before purchasing.
They may also suggest strategies like making on-time payments consistently, reducing credit utilization below 30%, and keeping old accounts open to boost credit history. For borrowers with limited credit, they can recommend building credit through secured credit cards or small installment loans. Additionally, Loan Officers help borrowers understand how improving their credit score can lead to better loan terms, like lower interest rates.
Guidance Through the Pre-Approval Process
One of the most important steps when starting a home search is obtaining a pre-approval. A pre-approval provides buyers with a clear understanding of their budget, helping them focus on homes within their price range. Sellers and real estate agents are also more likely to take a buyer with a pre-approval seriously as it shows they are past the ‘just looking’ phase and are ready to buy.
It’s important to note that not all pre-approvals are created equal. A pre-qualification is not as strong as a pre-approval. The strongest pre-approval, such as the one offered by MiMutual Mortgage, is known as a TBD approval. A “To Be Determined” pre-approval goes beyond a standard pre-approval by fully underwriting the borrower’s financials even before they find a home. This means that the lender evaluates key financial factors—such as income, credit, and down payment—early on, reducing the time it takes to close the loan after the buyer finds their new home.
This approach makes a buyer’s offer more attractive to sellers, and reduces the likelihood of last-minute financing issues. This gives buyers a competitive edge in a multi-bid situation or in a housing market that has limited properties for sale.
Future Planning
At MiMutual Mortgage, our Loan Officers value a long-term commitment to their clients and will take the time to understand a borrower’s financial considerations at the time of the home purchase and for future aspirations. Even after closing, Loan Officers assist homeowners with future planning by advising on refinancing options, mortgage term adjustments, and equity strategies.
Working with a dedicated MiMutual Mortgage Loan Officer means having more than a lender. We serve as a partner in a borrower’s homeownership journey by offering tailored solutions and responsive communication, ensuring a smooth, top-notch experience.
Reach out to us if you are ready to learn how homeownership is possible for you.
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- If you have questions, reach out to your MiMutual Mortgage Loan Officer.
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