It’s Clayton Collins back again with some handy real estate information for you. If you’re thinking about buying a home, then you’ll likely have to think about financing options unless you have the entire funds in cash. Basically, you’ll need a home loan. This is when you will be paying a portion of the sales price and the lender will provide the rest. The home loan process can be complicated, but let’s talk about some of the basics. Keep on reading for more information.
Home loans are meant to help the buyer secure the funds to purchase the home. The lender will base the home loan on the borrower’s ability to repay the loan. Keep in mind there are several different types of home loans. Some of the more common loans are USDA, VA, FHA, Conventional, Construction, and much more. The Lender’s Network website states that “FHA home loans are one of the most popular types of home loans used by first-time homebuyers. They have the lowest credit score requirements of any mortgage type. If you have a 500 FICO score you can qualify for an FHA mortgage with a 10% down payment.” Be aware that when getting a home loan, both the buyer and the property will need to qualify for the loan. Kind of like matching shoes to an outfit. The two pieces need to coordinate.
Depending on the type of loan and the individual circumstances, the down payment for the home loan will vary. No two home loans will look the same. It’s best to meet with a lender to assess what loan will work best for your individual situation. I have many connections as a realtor with several excellent lenders in the area. I would be happy to recommend some for you. You are always free to choose your own lender but call me today if you’d like help.
You might also want to do a little research to find out some basic information. You can use free or inexpensive websites to find out what your credit score is. There are also online mortgage calculators you can check out that will give you an idea on your estimated payments and loan amounts. Just remember that individual results will vary.
Another thing to consider is getting pre-approved for a home loan before you begin your home search. This will give you a clearer picture of what you can afford and will make the process much easier and more enjoyable.
Once the pre-qualification is squared away, you can begin your home search. During this process, it’s important to not make any financial moves that could affect your credit score. This is not the time to miss a payment or apply for a new credit card.
So, what do you think? See, the loan process is not so intimidating once you break it down. Besides, you never have to go it alone. Give our team a call today to help you with all your real estate needs. We will be by your side throughout the whole process.