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.