How to Shop for A Mortgage
Shopping for a mortgage can be confusing, so it’s important to know what you’re looking for. To get the best deal, you’ll have to compare multiple offers and zero in on a loan that charges a rate and monthly payment that works with your budget. Before you begin shopping for a home or a mortgage, read this article to know what needs to be done.
Tips to Shop for A Mortgage
Do you research
At present, there are four types of mortgages that lenders offer:
-Conventional loans
– FHA loans
– VA loans
– USDA loans
Each of these mortgage types have varied eligibility requirements and benefits. So, make sure to do your research and pick the right one for you.
Know What Term to Select
The loan term essentially refers to the period of time you have to repay the loan (both principal and interest). Loans typically come in 15-year or 30-year terms, but other options are available, though less common. Other factors like your credit score may also affect what term lengths you can get. Select the term that best suits your repayment capacity.
Gather Your Documents
The mortgage application process typically involves a lot of paperwork. Your lender will need to know what you owe in student loans and car payments, as well as all your other debts. The lender will also want proof of your income and investments, along with any tax or child support/alimony documents. Your rent/utility history, gift letters, and records of bankruptcy or foreclosure may be helpful as well. So, before you begin contacting lenders, make sure to gather all your documents.
Compare Rates
When financing a home, it’s important to know what you’re paying and how much it will cost. Shop around, so you’re able to get the best rate and terms, but compare more than just interest rates; look at closing costs, taxes, and other options that could affect the bottom line.
Once you do your research and zero in on a loan, you can start the application process with all the documents you have ready.
