Buying a home is one of the most important investments you will ever make in your life. Figuring out how to finance your new home. But finding the right home is just one step in the process. Choosing the right home loan can be just as important. Here are some tips to help make finding the right home loan as easy as possible.
Top 5 Home Loan Tips for Buyers
Tip #1 – Start Saving for a Down Payment
Many people save for several years to come up with the down payment to their future home. The higher your down payment is, the lower your loan and monthly payment will be, therefore it’s a great idea to save as much as possible. But if you are buying a home and are unable to come up with the down payment needed on your own or through family and friends, there are other options for you. Speak with your lender about down payment options you may have, to include:
- Forgivable Loans (At Zero Interest)
- Deferred-Payment Loans (At Zero Interest)
- Low-Interest Loans
Tip #2 – Get Your Financial Documents in Order
Be sure to ask your lender what documents they will need in order to process your application. The exact documents needed when buying a home will vary depending on several factors, including your lender, loan amount and income.
To help get you started, here’s a list of documents you may need:
- Pay Stubs
- Proof of Employment
- Employer Contact Information
- Tax Documents
- Bank Statements
- Business Documents
- Debt Information
- Confirmation of Property
- Residential History
- Proof of Additional Income
- Stocks, Bonds and Savings Statements
- Earnest Money Source
Tip #3 – Utilize a Mortgage Calculator
Our mortgage calculator is easy to use and can give you a great overview of what your monthly payment may look like. You can play around with different homes by entering the home price, down payment, interest rate, and mortgage period to see how your monthly payment changes. (Check out mortgage calculator on right sidebar.)
Tip #4 – Compare Loan Options
When you’re borrowing money, you want to find a loan that meets your needs and budget. Ask your lender to explain the pros and cons in each of your loan options. All mortgages are not created equal. Also when comparing lenders, here are some of the loan terms you’ll want to review.
- Interest rate and APR
- Loan term
- Monthly payment
- The total amount
Tip #5 – Don’t Mess up Your Credit During the Loan Processing
Before your loan closes, your lender may pull your credit a second time to see if there has been any changes made to your credit score during loan processing. During this time, be careful not to do anything that would bring your credit score down like making a big purchase, opening a new credit card, closing an existing credit card, or even taking out a personal loan. It is critical to keep your financial household in order and stable leading up to closing, as anything that could create uncertainty for the lender may weigh heavily on their underwriting decision.
*Vetrice Barber is a REALTOR® at eXp Realty. No guarantee, warranty or representation of any kind is made regarding the information on this blog. All information should be independently verified. Vetrice Barber and eXp Realty expressly disclaims any liability in connection therewith.