Buying a home is one of the most important decisions you can make. But finding the right financing at an affordable interest rate can be tricky. To make the process just a little easier, we've put together a checklist of everything you need to keep in mind before you close the deal.
The Mortgage Process
Before we delve into securing a great interest rate, let's talk about the mortgage process first. Knowing how much house you can afford will save you time, money and even disappoint when shopping for a home loan. Your financial picture plays an enormous role when determining your mortgage payment and interest rate. Even if you have a high-paying position, biting off more than you can chew with a high mortgage is asking for trouble.
Acquiring a Loan
Being approved for a home loan is complex. How do you know which is best? Do you ask your local bank or find a mortgage lender through your agent? Ultimately, the choice is yours, however, at Effective Agents, can take the guesswork out of finding the right home loan.
Taking out a loan is a huge undertaking and should never be done without careful consideration. Regardless of bank or mortgage lender, you will have to clearly explain why you want a loan. You also need to demonstrate the ability to pay it back and show that you are not a risk. Keep in mind that all mortgage loans are not the same, so you need to research each lender you are considering prior to making a final decision.
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Although there are loans for people with less than perfect credit, even if you're approved, you may pay for it. On average, a credit score of 580 or above is the standard, however, approval is done on a case-to-case basis. If your credit score is low, do what you can to strengthen it. Request copies from each credit reporting agency and verify the information is correct. If possible, take the time to pay off your debt to increase your overall creditworthiness.
How Much You Should Put Down For a Home
Your down payment will depend on several things. Specifically, your credit score, the type of loan you are approved for and the lender who approves you. Conventional mortgages usually ask for 20 percent, whereas FHA loans require considerably less. Again, it depends on your financial picture, assets, cost of the home and even the mortgage terms.
There are a lot of twists and turns to take when purchasing a home. Don't trust your gut when it comes to your wallet and utilize the help Effective Agents
can offer! Better negotiation and deep understanding of the local market are guaranteed.
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