How to Find a Loan When Financing Your Home
Find a Loan
Buying a home is a beautiful experience. It’s exciting, fun, and gives you a sense of achievement.
But finding a house you like is just one piece of the puzzle. You also need to find the right home loan.
Here are some tips to help you find that home loan you need.
Start Saving
Depending on the lender and the loan you get, you will need a down payment anywhere from 5% to 20%.
The more you have for your down payment, the more likely you are to get a loan.
Establish a monthly budget that helps you stash some money away as a down payment.
Once you have a nice nest egg, determine what your budget will support.
Consider having a certain amount deposited from your bank account into a savings account.
If you still can’t come up with a sizeable down payment, look into different types of loans.
You might consider a Veterans loan, an FHA loan, or a credit union loan as these loans are typically more affordable.
For instance, credit unions offer lower fees and loan rates. With these benefits, you will be able to keep costs lower than you would be able to with a traditional loan.
Review Your Credit Score
It is critical to have good credit as this can give you the best home loan option.
Get a copy of your credit report and see what your credit looks like to lenders before applying for the loan.
Each year, you can get a free copy of your credit report from all three of the credit reporting agencies, Equifax, Experian, and TransUnion.
Documentation
Get your documents in order. Applying for a mortgage requires proof of income, your W-2s, and at least two tax returns.
You’ll also need two bank statements.
Calculate Your Mortgage Payment
Mortgage calculators help you determine your monthly payment. They are easy to use and show how much your payment would be.
You can find a mortgage calculator online. Just do a quick search.
Compare The Offers
Apply for more than one mortgage. You don’t ever have to accept the first offer that comes your way.
Every mortgage is different, even if they all have the same interest rate. Some require more of a down payment.
Others have points and fees that make it more expensive, so read the fine print to determine the best loan option.
There are many mortgage loan options on the market, and while your parents may have only had a 30-year fixed-rate loan option, that doesn’t mean this is the right loan for you.
Shop around and apply at various banks, credit unions, and mortgage lenders to see what they offer and the overall loan terms.
Category: Debt
