Homebuying 101: All About Financing

There are several types of loans available when financing a home. What is most important is finding the one that works for your financial and personal/family situation.

There are different loan options to consider. The most common are the fixed-rate mortgage loan and the adjustable-rate mortgage (ARM). With the fixed-rate mortgage, your interest rate will never change, regardless of what the economy does. The adjustable-rate mortgages (ARMs) have interest rates that adjust periodically during the life of the loan.
Calculate how different rates will affect your monthly payments using a mortgage calculator.
When calculating monthly payment, be sure to consider PITI (principal. interest, tax and insurance).
Shop around for a mortgage lender or use the builder’s preferred lender.

Lenders Should Be Offering The Best Possible Loan They Can

A good lender will:

Offer local approval and won’t have to send your application to another state, which could lead to additional requirements.
Offer competitive rates and be open to compare with others lenders.
Be reliable and communicate deadlines and necessary information to you.

INSIDER TIP: To help make your purchase smoother and quicker, we recommend getting a mortgage pre-approval instead of just a pre-qualification. A pre-qualification is just an estimate of what you can afford and a pre-approval provides more detail and accurate information about how much you can exactly afford. The lender will review your income documents for the pre-approval and ensure that you are accountable and ready for the purchase. Oftentimes, this can make you a stronger candidate to the seller.

Anna Young