Things to Consider Before Availing of Home Loan Options

It’s easier said than done to get a home loan. Though it may appear that all banks are willing to lend, obtaining a loan can be a time-consuming process. As much as home loan options are being advertised these days, it seems like everyone gets one.

It’s all too easy to accept the first mortgage package you’re offered when applying for a house loan, as long as it delivers you the keys to the home you’ve fallen in love with. This is why, even if you’re in a hurry to make an offer on the house of your dreams before someone else does, you should do your homework to ensure you’re getting the best home loan for your needs and circumstances.

Before you dive into one of the options it is important to consider the following points:

Fixed-Rate:

The interest rate on your home loan is particularly important since it influences how much of your monthly payments go toward equity in your property and how much goes to the bank. It’s a little trickier than picking the house loan with the lowest interest rate. You should also examine whatever type of interest suits you best.

Keep it simple, when it comes to choosing an interest rate that suits your home loan criteria, you have two options: Fixed Rate or Floating Rate.

Negotiation of Interest Rates:

The best thing to do, whether looking for home loan options if you choose a fixed or floating rate, is to explore and acquire as many quotations as possible. You might be shocked at how much money you can save. It’s important to remember that lenders can’t “price match” each other’s rates.

Closing costs can be credited to a borrower under certain circumstances, according to mortgage lenders. The most common reason for this is when lenders need to stay competitive in a rate environment when rates are decreasing, or when delays result in a blown credit lock.

Examine Your Credit Report:

One of a lender’s primary house loan conditions would be the applicant’s credit score if they intend to grant you a substantial sum of credit. Let us break it down for you if you’ve never checked your credit score or aren’t sure what it signifies.

Your credit score is a three-digit figure ranging from 300 (poor) to 900 (excellent) (Excellent). The following are the five determining variables that go into establishing your credit score:

Your payment history shows how well you’ve paid off previous loans which make 35 percent of the total score.
Total Debt- How much money you owe in total which sums 30 percent
How well you’ve paid off previous bills is determined by your credit history making 15 percent
Credit Types- What types of debt have you had in the past, such as loans or credit cards? Counting 10 percent
New Credit – The amount of money you want to borrow right now (ten percent)

For most house loans, a credit score of 620 to 640 is required.

Job Security:

One of the most prevalent sources of frustration for first-time buyers is that they are just starting out in their professions and lack a track record of work stability. That isn’t to say they won’t be able to get a mortgage. Indeed, loan applications have been granted based on job offers.

A lender would often want to check your employment history and payment records for the previous two years. This does not imply that you must have held a traditional job. This is also permissible if you have been self-employed and kept accurate records. Bonuses, overtime, and commissions may be excluded by some lenders as proof of income and job stability, especially if you have less than two years of work experience.
However, don’t forget to search offers related to low down payment mortgage options, that can make a difference.

Thank you,

Glenda, Charlie and David Cates