| It is likely to be one of the largest purchases of your | | | | factors in the market place, most importantly, what |
| life, and it can be extremely nerve racking and | | | | the interest rate is at the time that you get your |
| overwhelming. Buying a new home! Whether you are | | | | home loan. In the past few years, the market has |
| buying your first home, or moving to a new home; | | | | seen a sharp decrease in interest rates. In fact, some |
| purchasing a home and shopping for home loans is a | | | | of the lowest rates in history have been experienced |
| major decision that requires a lot of time and energy. | | | | in the last few years. |
| Where Do I Start? | | | | If the interest rate is quite low relative to the last |
| If you are shopping for a new home and a home | | | | few months when you apply for your home loan, |
| loan for the very first time then you may become | | | | than you may want to consider locking into a fixed |
| very overwhelmed very quickly if you do not take it | | | | rate mortgage. That way, even if the interest rate |
| slowly. The first thing that you should do is start | | | | climbs in the future, you will be guaranteed the same |
| researching your options. Collect all of the financial | | | | low rate that you signed on. |
| information that you have and approach your bank. | | | | However, if you think that the interest rates are still |
| A good place to start is with the financial institution | | | | likely to fall then you may want to sign in on a |
| that you do most of your banking with. You have | | | | variable interest rate home loan. That way if the |
| likely built up a reputation and perhaps a relationship | | | | interest rate falls, you can still take advantage of the |
| with your bank and that will help when you are trying | | | | new lower rate. You will want to check with your |
| to get a loan. You will have to gather together all of | | | | lending institution on the variable rate home loans that |
| your financial information including: | | | | they offer, as they do differ greatly. |
| * Pay stubs | | | | What Term Length Should I Choose? |
| * Proof of other income sources | | | | Another big decision when you apply for and sign |
| * Car payment records | | | | onto a home loan is the term of the loan. This is a |
| * Other debt information | | | | very important decision because the length of the |
| * Savings and investment information | | | | loan will determine how much interest you will pay |
| Your financial institution should be able to determine | | | | over the term of the loan. There are a few ways to |
| from the information that you bring in what type of | | | | look at this problem. If you require low monthly |
| a mortgage you qualify for. The bank or financial | | | | payments than you may want to choose a longer |
| institution will also pull a credit report for you to see | | | | term loan, such as a 25 year or a 30 year term |
| how your credit looks. | | | | instead of a 15 year term. If you extend the term of |
| Should I Only Visit One Bank? | | | | your loan, then your monthly payments will be lower, |
| No, definitely do not stop shopping for a mortgage | | | | however in the long term you will be paying more |
| after visiting only one financial institution. It is | | | | interest. |
| definitely a good idea to shop around for the best | | | | If you are in a situation where you are able to handle |
| mortgage rate. Different institutions may offer you | | | | slightly larger monthly payments, then you will be |
| different payment options and lower interest rates. If | | | | paying off the principal of your home loan much |
| you have poor credit, then you may want to talk to | | | | faster, and not paying as much interest. |
| a mortgage broker who will likely be able to offer | | | | Are There Other Ways Of Paying My Loan Off |
| you some options that you can afford. | | | | Faster? |
| Get Pre-Approved From Your Bank | | | | Most types of loans will allow you to make balloon |
| Before you even go out house hunting it is a good | | | | payments at least once a year. A balloon payment is |
| idea to get a pre-approval from your bank or financial | | | | where you can pay directly on the principal of the |
| institution. This process will take a little bit longer, but | | | | loan, so you are not paying any interest. This is an |
| it will pay off in the end because you will know | | | | excellent way to reduce the principal of your loan. |
| exactly what price range to look at when you are | | | | And if you are able to make balloon payments, they |
| house shopping. | | | | are worth it. |
| Another benefit to being pre-approved is that when | | | | So Now What? |
| you find a home that you are interested in, if the | | | | When you are ready to start shopping for a home |
| seller is in a hurry to sell, they will often go with a | | | | loan, whether it is your first or your second, |
| buyer who has been pre-approved because it is a | | | | remember to do your research. A good place to |
| sure thing. | | | | start is with a mortgage calculator. You can find a |
| What About The Interest Rate? | | | | mortgage calculator on the internet. This is an |
| It can be overwhelming when you go to get your | | | | excellent tool to help you make some of the tougher |
| home loan; there are so many decisions that have to | | | | decisions about your mortgage. But there is no |
| be made. Do you want a variable interest rate or a | | | | replacement for discussing your individual case with a |
| fixed interest rate? How do you decide? | | | | financial institution. Just remember to shop around |
| Your decision will likely depend on a number of | | | | before you decide which home loan is right for you. |