I don't know about you, but I feel rental prices have gotten just ridiculous now. I mean $2,500 a month for a 1 bed/bath in River North? Do you know what you could do with that money?! I understand some people are new to the city and need to figure out if its right for them to buy or where they want to be at but still, it is a lot to throw away. And that is essentially what you are doing because you are not building equity, you are just lining someone else's pockets.
OK, so you realize you would rather not throw that money away and decide to buy, now what? Buying real estate for the first time can be very overwhelming. There are so many moving parts plus IT'S THE BIGGEST FINANCIAL DECISION YOU WILL EVER MAKE!!! So where should a buyer start?
The first thing every buyer should do is speak to a mortgage lender and get pre-approved. A lender is someone who can help you determine what you can afford to buy based on your financial situation. On a side note, they can also let you know if there are any red flags in your finances that could affect your buying power. Red flags that you may want to get fixed before you actually decide to buy. Your lender is going to look through your finances, pull your credit, and give you an over view of what your price range will be. This might sound a bit intrusive but it's completely necessary before you ever start looking at properties. Think of it this way, you can't build a house without building a foundation first right? Well, you can't make an offer without a pre-approval, so it makes total sense to get this done first! A pre-approval is the foundation for your purchase.
The pre-approval process is typically not a long or difficult one, so getting this major step out of the way should be simple. There are a lot of lenders in the city you can go to but not all of them are created equal. If you have an agent you are speaking with, they will likely have a few recommendations they can make for lenders they trust. If you are not speaking with an agent, then do your research like you would be looking for a good restaurant. Google Chicago lenders, check out reviews on sites like Yelp! and Zillow. You want to make sure you are working with a very good lender in the beginning.
A couple of things to consider. You want to make sure you are working with a lender who knows the Chicago market. Chicago is a unique city and not every lender (for example, someone from California) may know how to lend here. Trust me, I've seen it before from the big banks where they "promise" they can get the loan approved but then ask the buyer to sign addendums for a 2-month extension. It's best to work with someone local. Second, speak to a few lenders. It's your right to use who you want and it is always best to speak to a few lenders to see who you feel the most comfortable with and who is going to give you the best deal. It's not just about the interest rate so make to ask about all of their fees. Finally, pick a lender who you like and stick with them throughout the process. I can't stress this enough. If you end up getting an offer accepted on a property and then decide to switch lenders, it's a huge red flag for the seller's side and could cause major issues or even the deal to be canceled.
If you are beginning your search and want a few good lenders to speak to I am happy to make recommendations so please do not hesitate to reach out!