Mortgage Services - 5 Tips on Home Financing
A home is likely the largest purchase you will ever make. Before you buy, keep in mind these tips regarding home financing.
1. Ballpark it. How much mortgage can you afford? Use our handy mortgage calculator (below) to determine an approximate monthly payment (including principal and interest) on a dollar amount at various interest rates.
2. Seek approval. Before you begin your home search, get pre-approved, not pre-qualified. What’s the difference, you ask? Pre-qualification is based on financial information you provide to a lender, who then estimates the amount you can borrow. This estimate is based solely on the information you provide regarding income and assets, which is not verified by the lender.
For pre-approval, on the other hand, the lender verifies your financial information and then commits to lending you a specific amount. This loan decision is based upon documented and verified information regarding your income, employment, liabilities, assets and available cash. There’s no cost or obligation for pre-approval and the process is generally quick and easy.
The bottom line is, pre-approval gives you buying power and peace of mind as you shop for your new home, not to mention credibility with the seller when you make an offer on your dream home.
3. Pick a lender. But not just any lender. You see, lenders today may specialize in a certain time of loan or program; for example, FHA or new construction. Your LifeStyle Realty agent can lead you to the right lender for you.
4. Ask questions. In order to find the best financing for you, ask these questions of your LifeStyle Realty agent or your lender:
- What’s best for me: a fixed interest rate, an adjustable rate, or some combination of both?
- Should I select a short or long repayment term (e.g., 15 years or 30 years)?
- Can I qualify for a VA or FHA loan?
- Can I buy a house if I my credit history needs repair?
- What are my options if I have no cash for a down payment?
5. Know your lender. When you begin working with a lender, be sure to inquire about current interest rates, applications fees, closing costs and other costs associated with financing a house. You’ll also want to ask about the timeframes of loan approval and closing.