The process of buying a home can be complex, so much so that new buyers may be too confused or daunted by the process to do it properly or even try at all. Fortunately, many concerns that may arise from such can be answered by asking the professionals a couple of questions. Some of the most vital questions you can ever ask to ensure you buy your home properly revolve around mortgage loans.
So, if you want to ensure you can buy your dream home, here are a couple of important questions you must always ask when looking for a home loan:
1. What Are My Down Payment Options?
One of the biggest concerns for those who want to buy a home for the first time is how they will be able to finance the majority of the price of the property. In many cases, you will be required to have a 20% down payment, which can seem a little too much for someone who is purchasing their first home. Fortunately, there are a couple of options you can use to help make sure you can finance the home you want to buy.
One of the most popular down payment options is a down payment gift. This is when a family member or close friend will give you the money you need to finance the home you want to buy. Another option you can use is a down payment loan. This is where you will apply for a home loan and be given the money to put towards buying the home.
That said, each option has ups and downs, so weigh them against each other and pick what’s best for you.
2. How Do I Get My Mortgage Loan Pre-Approved?
If you have found a home you wish to purchase, an excellent place to start is to get pre-approved for a mortgage loan. This is because you can then take that approval and show the seller or lender that you have the means to purchase the home you want and that you are a serious buyer of the home.
The best way to get pre-approved for a mortgage loan is to make an appointment with a mortgage specialist. They will then sit down with you and go over your financial circumstances to determine what type of mortgage loan would be right for you.
After this, they will present you with a pre-approval letter. This will tell you how much you can afford to pay on a mortgage and will also include an estimate of what mortgage terms you can expect and the mortgage interest rate.
3. What Types Of Loans Do I Have Access To?
A wide variety of loan options are available to you when you want to purchase a home. Some popular home loan options include mortgage loans, FHA loans, and VA loans.
Mortgage loans are popular among most buyers and are offered in two types: fixed-rate mortgage loans and adjustable-rate mortgage loans. Fixed-rate mortgage loans are typically fixed to a specific interest rate for the duration of the loan, whereas adjustable-rate mortgage loans fluctuate with the market. It is worth noting that an adjustable-rate mortgage loan will typically have a lower interest rate than a fixed-rate mortgage loan, but the risk of fluctuation can offset that by a significant amount.
FHA loans are popular among first-time home buyers because they offer lower interest rates and a lower down payment option. This means that new home buyers can get approved for home loans with a down payment of just 3.5% of the home’s total price.
VA loans are popular among military veterans as they offer a lower interest rate than most other home loans. Additionally, VA loans are also possible for widows or widowers of veterans.
Buying a home can be challenging, but with a bit of help from the professionals and some friends and family, it doesn’t have to be. When you are looking for a home loan, there are a few questions that you should always ask to ensure you buy a home without any issues! But of course, if you have any other questions in mind, feel free to ask them.
Total Lending Concepts is your go-to hometown mortgage lender, offering a variety of home loans to fit any situation. If you are looking for a home loan, get in touch with us today!