Getting ready to purchase the first home? If yes, you have come to the right place. To make your home loan process easier, in this blog, we will let you know what to keep an eye out for, from start to finish.
How to find the best mortgage rates?
Shop around: You may be chosen the lender who your real estate agent typically work with, but that doesn’t guarantee you will get the best mortgage rates in the Pacific NW. You need to shop around, compare their mortgage rates and choose a lender who offers you a home loan at the competitive mortgage rates.
Compare fees: Mortgage rates aren’t the only factor when it comes to the cost of your home loan. Make sure to look at each lender’s fees and closing cost to fully assess the cost of the loan. When you apply for a loan, your mortgage lender will give you a form called a Loan Estimate that makes easier to compare the total cost of the loan, including fees.
Increase your down payment: Did you know that if you increase the amount of the down payment, your interest rate would be decreased. So, if you are going to buy a home loan, first save down payment as much as you can. Your down payment will be more than 20% of your loan.
Improve your credit score: Your credit score plays an important role because it affects the mortgage rates. As per the FISCO, home loan buyers credit score must be higher than 720 to get the lowest mortgage rates. So, if your credit score is lower, then before applying for a loan, pay your bills on time and free from all debts.
List of Different Types of Loans:
Fixed rate loan: When you apply for fixed-rate loan, you need to pay a fixed interest rate throughout the loan term. This loan program is for individuals who don’t want to manage interest rate fluctuation.
VA: These types of loans are available to veterans of the US. Military and also available to those who have served survivors. VA mortgage loans are backed by the government which are available exclusively to military veterans.
Adjustable rates: Adjustable-rate mortgages have interest rates which fluctuate over time, usually in a way which reflects the cost of lending in the credit market.
Jumbo: A jumbo loan is also known as a jumbo mortgage. It is the type of financing that exceeds the limit by the Federal Housing Finance Agency. This loan is for the buyers who want to purchase the home of high value.
PMI: PMI, also known Private mortgage insurance is lender protection in the event if buyers are unable to repay the loan amount on time. The mortgage company requires PMI because it is assuming additional risk by accepting the lower amount of upfront money towards the purchase.
Conforming: A conforming loan is a mortgage loan that conforms to financing limits set by the Federal Housing Finance Agency. This loan is for individuals who don’t need a huge loan.