You’ve been renting an apartment for years with your family. For the longest time you can remember, you and your family have been transferring from one place to another just to look for apartments which are apt for your budget. You were able to live, but you admit it was never easy. And now, you want to end the cycle; you want to purchase a home for your family. You don’t mind if the home is quite small – all you care about is providing a suitable home for your family. And since you don’t have enough money to purchase a home outright, you’re thinking of taking out a home loan to achieve this goal.
Before you immediately work with another lender just to acquire a home loan, there are a lot of things that you should think about first. This decision involves your money (and time) that’s why as much as possible, you should only do business with a lender who gives you the home loan you need. To help you do this, keep in mind these things:
- Mortgages are not commodities: Yes, you might need the money to buy a home but keep in mind that this process is not “all about the rate.” If you have this mindset from the start, chances are, you’ll be disappointed easily. Instead, you should remember that taking out a home loan is about finding a trusted lender who’ll help you navigate through a complex transaction, making things easier for you. You should be working with a lender who’ll give you the most honest advice and professional support needed in the entire home loan process.
- Online is not the best place to transact your home loan: With the advent of technology, you can do almost anything on the internet. And while it’s perfectly fine to buy a book, bid on sports equipment and buy music albums on the internet, it’s never the same when you’re taking out home loans. Yes, you can always use the internet to search the best lenders and calculate your potential loan amount, but you shouldn’t do business with a lender who is solely present online.
- Pay your bills on time: When you have too many debts, your credit scores can be adversely affected. And when a lender sees this, it can also have an impact on your home loan terms and the amount you receive. This is the reason why before taking out a home loan, you should make sure that you have a good credit score. You should pay all of your bills on time, all the time. The same is still true when you’re done paying your home loan. Your ability (or inability) to pay your bills can still affect your loan applications in the future.
- Do your own research: Ask around from your friends about home loans, and for sure, they’ll give you a handful of lenders you can work with. Searching for lenders online will also be a breeze. But you shouldn’t immediately trust a lender just because they’re seen on the internet. You should do your own research about the lender you’re eyeing to work with to determine if they’re credible or not.
- Aside from the lender itself, take the time to know the basic terms involved in the home loan process. For starters, you should learn the basics about adjustable rate and fixed-rate. While you’re at it, research any fees associated with your loan so you’ll have an idea of how much you’re going to pay. Determine the terms of the loan: This is one of the most important things to think about when taking out a home loan. The length of your loan will determine your repayment amounts and your interest rates throughout the life of the loan. When you pay the home within a longer period, your monthly repayments will be lesser. Generally, most home loans can range from one to seven years.
- Plans for paying off: Once you receive your loan, your responsibility doesn’t end – it actually just started. Your next move should be planning out how to pay off the loan. Decide if you’ll be doing it weekly or monthly. This is also something which should be thoroughly discussed with your lender. If you fail to pay on time, are there any fees? If there are, what are these and how much? Make sure that you get answers to these questions so you can prepare financially.
When you want to take out a home loan, for sure, many lenders would claim that they can give you the number one home loan. But you shouldn’t immediately believe what they say. You should be cautious in your decisions because this involves your financial resources – and money doesn’t grow on trees, right? Use the points presented in this article as a guide to determine which home loan to get and which lender to work with. And once you made the right decision, you’ll be able to finally welcome a brand new home for you and your family!
Amelia Smith believes that the key to understanding something isn’t always about how good the explanation is, but how engaged you are with the learning process. As such an integral aspect of her pieces for sites such as Go Bear is to ensure that insurance and banking concerns of her readers aren’t tackled just in a technical sense, but also in a way that they can relate to their lives.