Top 10 Real Estate Loan Tips You Didn’t Know
If you are considering buying a real estate property be it a house, apartment or condo, do not jump in shopping for the property yet, you must first find the best fitting loan for you and get it pre-approved. Investing on a real estate property is a big commitment that you must not rush in. Here are some tips to land the best loan fit to your needs.
If you are planning to stay in the property for at least 10 years, you may choose a loan with, an adjustable-rate mortgage, or ARM. The loan usually starts with low interest rates and is fixed for the first couple of years. If you want to stay for a lifetime, consider a 30-year loan.
Lenders greatly considers your credit profile so make sure that you have been responsible paying you taxes, loans and debts. If possible pay more than the required monthly payment and never miss even once. If you have various loans, pay the ones with highest interest rates first. It is better to have a 30% ratio of debt –to-income.
Consider you lifestyle and needs when buying a property. If you have a family with small children, it is ideal to choose a home nears parks, amenities and schools. Also think about your transportation for work.
Though it is better to put a 20% down payment for the mortgage, many lenders expect at least 3%. If you are using Federal Housing Administration loans, you have to pay 3.5%. If you are eyeing to buy an expensive grand house, you better save up first to easily close the deal. Also, take some time to research if there is a local down payment assistance that you can avail.
Plan your budget
While it is important to pay for your mortgage, you also have to pay your property taxes, homeowners insurance, regular and emergency maintenance costs, and other fees. You can ask a professional broker to help you calculate a practical home loan that best fits your needs and financial standing.
Surround yourself with professionals
Buying a home may be a dream almost becoming true until you get stressed by the process. Gather as much information as you can and follow your instincts together with the advice of the professionals. Ask the help of the professional that you can trust such as a real estate agent, a CPA or financial advisor. You can even go to a U.S. Department of Housing and Urban Development approved housing counseling agency.
Closing costs is the amount of money you have to pay to close the deal. Do not forget that you also have to pay the closing cost that may depend on the loan estimate that you received from the mortgage you are applying for.
Find the best mortgage
Do not settle with the first one you find. Get loan estimates from various potential lenders aside from the brick-and-mortar banks. Banks can offer discounted rates, but they just stick to their products, while other lenders can have flexible loans that can fit your needs.
Once you had chosen the loan you think is right for you, ask a mortgage broker to figure out how much can you borrow to buy a home. The broker will help you keep your expectations realistic when looking for a house within your budget.
Stash some cash
Do not use all your savings to pay the down payments and closing costs. Save some for emergency situations which is basically about six months’ worth of your salary.Posted on: April 10, 2016, by : papercut sg