Posted on: 11 April 2022
When you decide that now is the time to purchase a home, there is a bit more to prepare for the process than looking at neighborhoods and the type of home you wish to find. In addition to selecting your new home, make sure you carefully consider your home mortgage and what it will mean for you financially and over the years of its payback. Here are some recommendations to help you through the loan application process for your home purchase.
Select Your Financing Options
At the start of your home search, you will need to get your loan pre-approval process started so you can use it to guide you through the next few steps. Before you can shop for or bid on a home, you need to know what you can afford and how much you can get a loan for your mortgage. The mortgage is going to pay for the home's purchase and will vary according to the type of loan you get during qualification.
Your mortgage broker can help you through this selection process, providing viable loan options and discussing each of their features and benefits. It is during this time that you should ask questions about the payment terms, interest rate, whether the loan is variable or fixed, and what types of loan regulations you will need to adhere to. For example, if you are buying a home that you plan to turn into a rental, make sure your loan mortgage program can be non-owner occupied and allows for you to rent it out and not keep it as your primary residence.
Also look at the types of loans and their rates, upfront and closing fees, and the length of the loan. For example, if you apply for a 30-year loan, the loan payment will be a bit less than a 15-year loan but it will take you twice as long to pay it off. On the other hand, a 15-year mortgage will have a slightly higher payment but you will pay it off in half the time with a much lower interest cost over the life of the loan.
Look at a Down Payment
It is also important to consider how much you have available to put as a down payment for your home loan. A down payment may be required in many types of loans and is often about twenty percent of the home purchase. Evaluate your savings potential before you go into a home purchase so you have a sufficient down payment to put into your loan approval and help reduce your costs on a home loan when you finance less of the home.
For more information, contact a mortgage company like Fairway PNW.Share