Baseball was a big part of Matt Devine’s life when he was in college. He played for North Carolina State and was often on the road with his team. What he didn’t realize was that those years playing at the collegiate level would lead him to a career.
But he struck up a friendship with an NC State fan who frequented the team’s games and invited Devine to come work at his mortgage company.
“I didn’t even know what a mortgage was,” Devine recalls. “All I knew was how to hit a baseball.”
But he learned, and after a steep learning curve during his first couple years in the industry, Devine says things started to come together.
“It was like I was meant to be in the mortgage business,” he says.
Today, Devine is a senior loan officer and sales manager with Fairway Independent Mortgage Corporation in Leawood, Kan. (Fairway owns Home.com), where he helps homebuyers navigate today’s fast-paced housing market.
One of the best things you can do when you’re thinking about buying a home is to talk with a lender early on. There’s a lot of great homebuying advice online, but there comes a point when you need to talk to a mortgage professional. They can help you make a plan based on your finances, and they can dispel any misconceptions about the application process.
For instance, Devine says prospective homebuyers often delay getting preapproved*.
“If I had a dollar for every time I heard, ‘This is going to hurt my credit,’” he says. A lender will pull your credit when you get preapproved, and that hard inquiry will show up on your credit report and can temporarily lower your score, it’s a necessary part of the process. And getting preapproved is essential to being a competitive and informed borrower.
“Getting preapproved puts them in a position to put in a much more competitive offer,” Devine says.
These days, most real estate agents and sellers won’t show buyers a home unless they have a preapproval letter. The preapproval indicates that a lender has reviewed your finances and determined that you’re qualified to buy a home.
When you get preapproved, your lender will also tell you how much you can likely borrow. That helps you focus your home search on properties you can afford. To a seller or real estate agent, the preapproval tells them you’re a serious candidate for purchasing a home.
When Devine works with homebuyers, he makes sure they understand their homebuying power and that they aren’t overextending themselves in their home search.
“I look at their money like it’s my own money. The last thing I want them to do is look at a house they can’t afford,” he says.
That path only leads to heartache, as it will be hard to get excited about other houses after you think you’ve found – and lost – “the one.”
But it also costs you valuable time. In competitive markets where demand is much higher than the housing supply, you need to move fast when you find a home you like. The time you spend looking at houses that are out of your price range would be better spent seeing properties that you can afford so you don’t miss out on places that might be perfect for your budget and lifestyle.
Speaking of price ranges, here’s another reason not to wait. Demand for housing will remain high this year. Housing prices will continue to climb as well, and as they do, what you can afford may change.
“The cost of waiting is serious when you see that rates are going up and housing prices are going to appreciate,” Devine says.
Homes that you can afford now may rise in value, putting them out of reach later this year. Additionally, interest rates are expected to rise as well, and that also affects affordability.
Your lender calculates how much you can afford based on your estimated monthly mortgage payment, which includes the principal, taxes, homeowners insurance, and interest. If interest rates rise, you may get approved for a lower amount than you think.
Devine also has advice for renters who could buy a home now but are choosing to wait in the hope that interest rates will trend downward again.
“If you are trying to chase a lower rate, then you are looking at it the wrong way,” he says.
For one thing, rates are likely to increase throughout 2022, according to expert forecasts.
But waiting also means missing out on equity and wealth-building opportunities.
Devine broke it down this way:
If you buy a house for $300,000 and it appreciates at 5% a year, you could gain $15,000 in equity in the first year alone, after which the financial benefits compound.
Home equity is a pillar of wealth creation in the U.S., as it can be leveraged to purchase additional properties, fund higher education, consolidate non-housing debt, and other financial aims. The earlier you buy, the more equity you can build.
“If you’re renting, you don’t get any of that appreciation whatsoever,” Devine says.
The bottom line: “2022 is going to be a monster year in real estate,” he says. And that means there are big opportunities for motivated homebuyers.
Devine is committed to helping homebuyers make smart decisions and enjoy the benefits of buying properties they can comfortably afford.
But he has other passions as well. He’s an avid golfer and hopes to play on the PGA Champions tour someday. And he and his wife are involved with the youth in their community, helping to create access to sports and other activities and resources for children who might otherwise go without.
“That’s been a passion of ours, to help kids who don’t have as many opportunities,” he says.
To learn more about Devine or work with him, visit his website devinehomeloans.com.
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.
*Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.