As a soon-to-be home buyer, you expect your real estate agent to help you find the perfect residence. This might include driving you through neighborhoods, taking you to open houses, and browsing online listings. What you may not realize, though, is that your agent can also assist with finding a lender.

It makes sense when you think about it. The more experience a realtor gains, the more likely they are to develop connections with attorneys, inspectors, and lenders. Keep in mind, a real estate agent receives no financial incentive when they recommend a mortgage lender.

Many buyers, especially those going through the process for the first time, often have trouble choosing a lender. While they might understand the importance of having a pre-approval letter before viewing properties, they typically don’t know what sets one lender apart from another. This is where your agent’s preferred lender comes into play.

When you go with your realtor’s recommended mortgage lender, you essentially take away the guessing game that’s involved with finding one on your own. That said, is it the smartest move on your end to use your agent’s preferred lender? Here are some of the benefits of doing this.

Convenience

Nothing frustrates buyers more than having to juggle communication with multiple parties. Why have the same conversation with your realtor and lender when there could be a better option? If you’d prefer minimal back-forth and as little miscommunication as possible, we suggest using your agent’s lender.

Local expertise

Even in today’s favorable housing market, it’s still worth talking with a lender who knows your area specifically. That’s just what you get when there’s a partnership between your agent and lender. Trust us, you’ll have a better experience if your lender has the same local knowledge as your real estate agent.

Incentives

You read that right. If you’re buying a home in a new development, you may score incentives from the recommended lender. This could be free money to put toward upgrades, closing costs, or a combination of the two. Talk with your agent to see if their preferred lender offers incentives, as not all do.

Steps to take before using a preferred lender

Research lenders

We suggest shopping around for mortgage lenders, just as you would for a real estate agent. Do some research of your own and ask people you trust if they would recommend using their lender. The one you ultimately choose to work with should have extensive knowledge of the loan program you have, such as the VA loan.

You might find that you’re better off moving forward with an independent referral over your agent’s preferred lender. On the other hand, maybe you can’t pass up the aforementioned benefits of using your realtor’s recommended realtor. In any case, comparing lenders allows you to make the most informed decision.

Tip: Compare loan estimates to see how lenders stack up against one another. All lenders are required to use the same standard form, so it’s easy to see the different rates, fees, and terms.

Understand the fees involved

No home buyer wants to be surprised by outrageous fees at closing. However, according to The Balance, “The interest rate and loan fees aren’t the most important factors to consider when you’re choosing a mortgage lender, even one recommended by your agent.” One thing we should note here is that it’s almost always illegal for a brokerage to charge referral fees for a real estate transaction.

Ask about the approval process

Would you rather use a mortgage company that handles your documentation in-house or one that outsources these tasks to a third-party appraisal management company? It should come as no surprise that lenders who process loans internally typically provide a better experience for the customer. A buyer who would prefer the most efficient, transparent mortgage approval process should find a lender who will manage their loan from start to finish.

Get pre-qualified for a mortgage today

Part of what separates American Home Agents from other real estate brokerages is that we partner with American Financing, a family owned and operated lender. Whether you’re purchasing your first or forever home, the American Financing team can get you pre-qualified for a custom loan in as little as 10 minutes. You’ll benefit from in-house underwriting, fluid communication, and no upfront fees.

Don’t make the mistake of assuming that all lenders provide the same level of service! When you work with American Home Agents and American Financing, you can rest easy knowing your home buying needs will be met. American Financing offers the top loan programs in the industry, including FHA, conventional, CHFA, jumbo,

We encourage you to check out their five tried and true tips to find the best mortgage lender. See for yourself what makes American Financing the premier mortgage lender in Colorado.