The American Dream includes a family home and white picket fence. Gain control over your life by moving into your own family home. Learn how to get a home loan.
Home Loan Benefits
Houses cost a lot of money. While they provide you with a place for eating, relaxing and sleeping, they might be your most expense lifetime purchase. The modern home even has more advanced features, such as amazing smart appliances.
Due to their high cost, financing is usually required. Most people don’t have enough on hand to pay for the total cost of a house with a one single lump sum payment. So, how do can you qualify for a housing loan?
Qualifying Terms
Banks, financial institutions, mortgage brokers or lenders want to determine your creditworthiness during the application process. They want to be sure that your finances are strong enough for you to repay the mortgage. It is wise to carefully prepare your finances to qualify for a house loan.
Each lender will have its own specific rules for loan applications. But, most will look at similar factors. These are some of the things that lenders will look at to determine if you qualify for a loan:
- Down Payment
- Credit Score
- Income
- Bank Accounts
- Assets
A 20% down payment is standard for house. With a good credit score, you can get a more affordable mortgage. Set your financial house in order before you apply for a mortgage.
Types of Mortgages
Homeowners have many different types of mortgages to choose from. The 30-year mortgage is the standard, but some choose the 15-year mortgage.
Homeowners can choose between fixed and adjustable rate mortgages (ARM), also known as a variable rate. With the fixed interest rate, it is easier for you to calculate your budget, since the interest rate won’t change during the life of the loan.
Unfortunately, the variable rate might change during your loan period, which makes budgeting more difficult. The benefit of the variable rate is that qualification is easier.
Mortgage Payments
As you make payments, you build up home equity. With enough equity, you might be able to qualify for a Home Equity Line of Credit (HELOC). This HELOC can be used to make repairs, add a porch or any other project to increase your home’s value.
While maintenance can be a chore, it is a necessity with home ownership. You should save enough money for regular home maintenance and repairs.
Home Sweet Home
Mortgages allow for you to move into a larger living space. You have the freedom to decorate your home, however you want. Raise your children in their own family home – you can create great memories.
Enjoy your family homestead by finding affordable financing. Always make your mortgage payments on time. The right home loan allows you to have a place that is all your own.