Home Loan FAQ

There are many steps to the home buying process. You have to figure where you want to live, which includes canvasing neighborhoods, visiting schools, and looking up local statistics to see which location is perfect for you. Then, you have to figure out the type of home you want to buy, whether that be ranch style or an old-styled log cabin. Once these things are nailed down, you have to focus on the financing portion of the process. This includes determining how much mortgage you can afford, as well as finding cash for a down payment. Most likely, you will need to take out a home loan, which can also get tricky. In order to be considered a successful loan applicant, you need to understand what lenders look for and how to get a favorable review. The first thing mortgage lenders look at is your credit score. Most lenders will not accept anything under 620, so if your score is below that, you need to do some credit recovery. They will also look for proof of income, a steady job history, and your debt-to-income ratio. Interest rates also rely on credit scores. The higher your credit score, the lower the mortgage interest rate you will receive. In order to increase your credit score, be sure to pay your bills on time, keep the number of accounts you have to no more than a handful, and pay more than the minimum payment if possible. There are also more costs wrapped into a home loan that many buyers don’t realize. This includes Private Mortgage Insurance (PMI), property taxes, attorneys’ costs, and title insurance, to name a few. Be sure to check with your lender about these fees before the deal is closed. Buying a home and obtaining a home loan is a very important step to take. Contact one of our professionals to find a home and the perfect loan for you.