Wednesday, September 23, 2015

Selecting the Right Loan Product

There are plenty of loan options available in the market today, and selecting the right home loan for you is quite critical. Amidst the vast selection home loan options, choosing the right loan product has an immense impact on your financial future. This can be perplexing for most consumers because real estate, no matter how we try to simplify the case, is a still a complicated matter. Talking to a mortgage expert like Vahe Hayrapetian can help the consumers decide on which property they should buy — considering a list factors that are essential in making the decision.

Here are some tips to guide you on your home loan probe.

  • Talk to a reliable broker. Consulting a several brokers can lead you to your future home in no time. They can introduce you loan programs for different niches. These niches pertain to your financial situation. Find a broken that can offer the best loan programs suited to your unique financial condition. 
  • Identify the terms before comparing the rates. This refers to the length of loans – 30 year, 40 year, 50 year and interest only loan. The interest only loan is the one which you never have to pay off, but you have to make the monthly interest payments. The second one is the length of rate. According to experts, the safest loan is the 30-year fixed rate mortgage. You should also study the pre-payment penalty which is considered important in the home loan process.
  • Shop the rates and closing costs. After identifying the terms, the next step is to hire one mortgage broker that can pull a tri-merge credit report and ask for a copy of it. Have a copy of necessary files (credit report, bank statements, and tax returns) when you visit your mortgage broker and consult with them about the terms you exactly want for the loan. Your broker must provide a Good Faith Estimate (GFE) as well, so ask. 
  • Compare apples to apples. Seek the assistance of your broker in distinguishing which loan you should opt for. Always remember that practicality should matter after all. Compare your GFE’s total monthly payment and choose the lowest. The same case goes with GFE’s closing costs. However, be advised that some mortgage brokers will underestimate these costs to make their GFE more attractive but will explain them away at closing. This gets complicated, which is why you need to hire a reliable broker that will clearly illustrate the home ownership process step-by-step. 
  • Lock your rate. Rates do fluctuate from time to time, so locking your rate is necessary. If you fail to do so within 30-45 days before closing, your lender might penalize your rate. 

The decision to purchase a home can be kind of intimidating and is very complicated, but knowing the process and doing it in a systematic way can free you from hassle of unfavorable circumstances in having your dream property.

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