Buying a home need not be a far-off dream, but it will definitely take a lot of persistence, research and legwork on your part. It’s very important that you choose the best lending institution for your situation, because you will be committed to it for about 15 to 20 years. Here are some guidelines to remember to help you find a lender for a home loan:
- Find more than two options. Never settle for one loan option without comparing its rates with others. That’s why it’s important that you take the time to comparison shop, and that you shouldn’t be shy about inquiring about the best rates from all your possible options. Remember, asking for the best prices and consulting with a representative from any financial institution does not in any way obligate you to commit to their offer.
- Look for certified lending institutions. Apart from banks (which may charge higher interest rates), you should also look for other lending institutions that are accredited by the government. You can call up the Federal Housing Administration and request for a listing. In addition, you could also find out more about the FHA’s available housing programs offered with low interest rates (see number 3).
- Check out the FHA loan. The Federal Housing Authority is a federal government agency part of the US Department of Housing and Urban Development. It has programs for home purchase, with low down payment rates (as low as 3.5%). Go to their website to apply for a loan online.
- Know what factors to compare. When considering your options, it’s important that you know what major features to look out for. Some of the most obvious are the interest rates, the length of the payment period, and the required down payment. Another factor to consider include whether the rates are fixed or adjustable. If you opt for fixed rates, you will deal with the same rates throughout the duration of your payment period; adjustable rates change depending on the current rates, and they can prove to be advantageous to you if rates go down. You should also find out the estimated total monthly payments you will make, so you could compare the bottom-line prices on your different options.
- Know your credit score. Do remember that your credit score will be a factor in determining the interest rates that will be offered to you. Before you contact any lending institution, make sure that you obtain a copy of your credit score so that you will be able to institute any improvement that you can on your score.
It’s very important that you choose the lending institution very
carefully, as your choice could very well spell the difference between
tens of thousands of dollars in payments. Remember, take the time to do
comparison shopping among your options and don’t hesitate to ask
questions if anything isn’t clear to you. Ask for the bottom-line prices
so you would know how much you will be paying monthly. Finally, check
the name of the lending institution with the Better Business Bureau, so
you can double-check its reputability. Good luck, and hope this helped!