« Loan Application | Main | Loan Consolidation »
Home Loans
Whether you are looking to buy your first house or your fifth, you can’t go shopping for home loans without being current on the real estate and financial markets. Real estate professionals can certainly help you in this task, but you would be well advised to corroborate anything you are told with independent research.
As with any kind of financial undertaking, getting home loan is a process that goes a lot more smoothly when you have a plan. As the savings or investment account that represents your down payment starts to approach 10-15% of your target purchase price, you should consider developing a timetable for searching out and deciding among various home loans.
Location, location, location
Naturally, you need to know where you’re planning to live before you can start serious home shopping. By this time, you should have gotten enough basic information on home loans to know what your household income can support in the way of a mortgage. When you know this, you will also be able to figure out how much of a down payment gets you how much of a total loan. Then you will have a purchase figure that you can take to the open houses and real estate offices.
There are literally thousands of Web sites where you can get rates on today’s available home loans from any number of lenders. There are links on this very site, too. The information changes daily, so as your time-table progresses, make sure to update loan amount ceilings, interest rates, points and fees regularly.
Careful calculations
Be careful with the numbers, because they’re a lot easier to stretch and fudge on paper than they are in real life. Do not take on a burden that you “think” you can pay more on later. Make sure to calculate down payments and mortgage amounts based on a conservative, real-life estimate of your earnings and future capabilities. Home loans can be refinanced down the line, certainly, but you should never undertake to obtain a loan just so you can change it later. Be careful with your calculations.
Also use your head when it comes to the kind of home loans that you are considering. Although popular for a number of years, and still appropriate in certain instances, adjustable rate mortgages (ARMs) can be a real problem for many people. Successfully discharging an ARM mortgage means being prepared to make a larger payment after the first several years of the loan. If you are not positive about your future earnings increases, you should probably not get this kind of mortgage. An independent financial counselor, rather than a realtor, would be the best person to consult in this matter.
Steady on
When you do get all your ducks in a row – fees, charges, interest rate, points, etc. – then you should be ready to choose from among at least a few decent home loans. If you are not getting competitive rates, or seem to be paying an excessive amount in points or fees, do not hesitate to ask why. If there is something in your credit report, employment history or personal life that is worrisome to a lender, you need to know about it.
Finally, after all the variables have been considered and you are ready to accept one of the home loans on offer, go over your plan one last time. Confirm that you have (or will have, by the required date) the down payment needed to get the interest rate and monthly payment amount that you want. Before you sign on the dotted line, make sure you can go forward with your plan by considering every aspect of the deal. You don’t need to hurry into anything. You just need to be certain that you can carry on once the deal is done.
Topics: Home Loans |
