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Top 10 Home Loan Tips

Buying a home can both be a very fun and very stressful experience. The markets are always changing as well as the prices and beating out the competition can be tough. One of the major steps home buyers need to do and most likely consider is taking out a home loan. Picking the right loan can be just as important as finding the perfect home. Here are some ten tips to help make finding the right loan as simple as possible.

Save For a Down Payment

When it comes to the down payment of a house as you look for a home in Waltham, MA it can range from two percent to 20 percent. Establishing a monthly budget can help you save for it as you can allocate a certain amount of money for a down payment. Once you have figured out what your budget will be, you can start having money automatically deposited to a savings account from your bank account. In addition, you can have a portion of your check from your job be automatically put in your savings account.

Check Your Credit Score

Having a good credit score is something you will want to have in general in addition to when you are looking for a home to buy in Waltham, MA. With good credit, you put yourself in line to attract the best deal on a home loan. Make sure you have a copy of your credit report before your start the buying process. This report will show you what your credit looks like to lenders which they will consider when giving you that home loan.

Get Important Documents in Order

When applying for a mortgage, you will need to provide lenders with different financial documents to get it. Some of the documents you should consider getting together are your last two pay stubs, your most recent W-2, last two years of tax returns, and a current bank and brokerage statement. If you have these documents in order and at the ready then you will make the loan application process go by more quickly and smoothly, which is always a bonus.

Use a Mortgage Calculator

When it comes to buying a home in Waltham, MA buyers can get overwhelmed with all of the beautiful options they have at the ready. What many forget to do is calculate how much home they can afford. This is where the mortgage calculator comes in handy as they can show you how much your monthly mortgage payout would be under that specific price. It will also calculate your monthly payment while considering the down payment and interest rates that are applied to that home.      

Compare Offers

Mortgages will be different depending on the selling price of a home. If different loans you are looking at have the same interest rate, you should look at the points and fees as they can differ and make one offer more expensive than another. Be sure to know all the components that go into determining the price of your mortgage. That way you can accurately compare the different offers being made so you can make the right financial choice.

Track Interest Rates

In the real estate industry, the one thing to keep an eye on are interest rates as they tend to fluctuate. It is one of the biggest factors in determining the cost of your mortgage month to month. These rates change almost daily so it is helpful to get a head of the curve and know what you are going to be getting yourself into as well as getting the best price of a home.

Get Pre-Approved

Some Waltham Realtors will want you to be pre-approved before they start working with you to find your dream home. The process to get pre-approved is simple as you are only required to provide information such as income, amount of savings, and investments if you have any. Being pre-approved gives you a sense of how much you can borrow from the bank as well as sets the price range of homes you can afford.

Understand Loan Options

When it comes to loans in the real estate world, there are many different types of loans that will cater to different people. Just because your parent has a 30-year fixed-rate loan does not mean that this loan is right for you. You will need to research the different types of loans, fixed-rate, and adjustable-rate loan, to see which is more appropriate for your own financial situation.

Be Prompt in Responding to Your Lender

Once you have applied for a home loan, it is crucial that you respond promptly to any requests for additional information. Once you receive the request, gather the required information, and get it to your lender as quick as possible. Waiting too long can cause a delay in the closing of your loan which will push back your entire home buying process.

Be Mindful of Your Credit During the Loan Process

If a lender has noticed a change in your credit score then they may pull your credit report a second time before your loan closes. Make sure you do not do anything that could lower your score while the loan is being processed. The worst feeling is preparing to accept a loan only to be denied because of your credit score fluctuation. Be sure to pay your bills, don’t apply for any new credit cards, and don’t take out any other loans until your home loan is completed.

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