5 Mortgage Tips to Help You Get the Best Deal
Applying for a home loan can be a confusing and sometimes frustrating experience for prospective homebuyers, but it doesn’t have to be. By keeping these mortgage tips in mind, you can make the home-buying process easier and ensure you are getting a loan that meets your budget and needs.
5 Tips for Getting the Best Mortgage Loan
1. Check your credit. Finding out your credit score should be the first thing you do before considering your home buying options. Your credit score will impact the types of loans you are eligible for, how much money you can borrow and your interest rate.
2. Set a budget. Use a mortgage calculator to determine how much house you can afford and stick to it. You should also keep in mind how much you will have to pay in property taxes, homeowner’s insurance, maintenance costs, furnishings and utilities. According to LearnVest, you should take the top amount you are approved for take 20% off of it to make sure you can afford the extra expenses that go along with home ownership.
3. Understand your loan options. By learning about your loan options before you apply, you can make sure the lender you choose offers the best type of loan for you. Types of mortgage loans include the following:
- Fixed-rate mortgages
- Adjustable rate mortgages
- Government loans
- Construction loans
- Professional loans
4. Shop around. When shopping for a mortgage, you don’t have to go with the first lender you talk to. You might get a better interest rate from one lender than you do for another. For example, if you’ve only talked to large banking institutions, try visiting a local bank to find out their lending options.
5. Prep your documents. Find out what documents you’ll need to apply for a mortgage and gather them before you meet with a lender. Required documents typically include:
- Credit report
- Tax returns
- Pay stubs
- Two forms of ID
- Proof of current property owned