Looking for a new home can make some people giddy, and this is especially true for younger couples who are looking for a place together. Before daydreaming of what it’d be like to live with the person you love, it’s best to be financially prepared first. Getting your finances in order will be paramount for a smooth purchase and your peace of mind.
A home loan should be on top of your agenda. If you want a few more pieces of advice, keep reading this list of tips about looking for a home loan.
Check Your Credit Score
Check your credit score rating before you get into mortgage hunting. Most Americans may not be aware of their credit score, but it greatly influences the interest rates that you and your partner would face when taking out a loan. Inquire about it.
Generally speaking, those with a lower credit score are given a higher interest rate. The person in your relationship with the higher credit score should be presenting their information when getting a home loan to increase their chances of approval.
Look For A Good Broker
Some couples make the mistake of going to any lender and broker in town, which is something you should probably avoid doing. Many risks can come along with going through shady mortgage brokers, from impossible loan terms and increased rates.
Instead of getting swindled, ensure that you’re talking to a legitimate mortgage broker. Check their background and ensure that their services match what you’re looking for. Ideally, they should be quick, low in interest, and reasonable on their terms.
Assess Different Mortgage Loans
There are several different loan programs available on the market. Couples should discuss what loan may work best for them and their current financial circumstances. Here are several different kinds of mortgage loans to choose from:
- FHA. If you and your loved one are first-time homebuyers, this loan program under the Federal Housing Administration can be incredibly flexible and forgiving. Even those with a lower credit score can expect to pay just 3.5% to less than 20% of downpayment.
- VA. The US Department of Veteran Affairs offers VA loans to any military members who have served the country in the past or are still in service. If one person in the relationship is eligible for this loan program, it’s definitely worth looking into.
- Conventional. Conventional loans are often faster to process than an FHA loan. Talking to the right mortgage broker can guarantee as little as a 3% down payment on the property that you’re aiming to purchase.
- ARM. An adjustable-rate mortgage may suit you and your partner’s financial needs. This mortgage’s interest rate often fluctuates according to how the market is doing. Borrowers would be able to take advantage of lower interest rates from time to time.
- Fixed-Rate. A fixed-rate mortgage is pretty much the opposite of an ARM, as the interest rate will be the same percentage whenever you need to pay. Couples are advised to take a fixed rate when the market’s interest rates are low.
Conclusions
The journey to finally getting a home loan and purchasing a house can be quite a long one. Younger couples may find a couple of challenges along the way, but having that back and forth discussion with someone you’re open with financially can lead to good results.
Looking for home loans in Santa Ana? NetLending is a top wholesale mortgage broker with branches in Hawaii and California, offering the right mortgage, best rates, and ideal terms. Contact us today!
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