Buying a home can be an exhilarating experience, but finding the right home is only one part of the process. Choosing the right home loan, assuming you are not paying in cash, is just as important, if not more. Here are a few tips to help make finding the right mortgage loan a whole lot easier.
Save up For Your Down Payment
Depending on the type of loan you opt for and your lender’s terms, you may be required to pay up to 20% of the purchase price of the new home as the down payment. This can amount to a substantial figure, so it’s important that you start saving money to make the payment.
Check Your Credit Score
Having a good credit score can help you secure a lower interest rate and save a ton of money in the long run, which is why it’s important that you obtain a copy of your credit report before you start the home buying process. This will help you work towards improving your credit score and getting a better interest rate.
Get Your Financial Documents Ready
When applying for a mortgage, you will have to provide a number of documents to the lender. Having these documents ready will help the process move a lot faster. At a minimum, be prepared with at least two pay stubs, the last two years’ tax returns, your most recent W-2, your brokerage and bank account statements.
Use a Mortgage Calculator
Mortgage calculators are extremely easy to use and help you understand how much your monthly payment will be for different loan amounts. Thus, it will help you figure out how much you can afford to pay.
All mortgage loan offers are not created the same. Even if the loans have the same interest rate, there could be differences in the fees charged, which could make one loan a lot more expensive than the other. It’s important to check multiple loan offers, so you can make an informed decision and pick the best loan that’s available.
Respond to Your Lender Immediately
If you’ve applied for a home loan and get a call or email from the lender, make sure to respond as quickly as they can. They may be calling you to get some additional information or paperwork, so it’s important you send it to them as soon as possible.