Looking at the home loan process from the outside in, there’s dozens of steps that you will need to take. A lot of this can seem overwhelming and off-putting. Luckily, not every step along the way is going to be as hard as the next. Paramount Bank has five steps that you can easily work on to make the overall journey of getting your loan much easier.
Make Sure Your Credit Is Good or Higher
Your credit score is extremely important when looking for a home loan. The higher the score, the lower the interest rates, and thus more of your money is going towards your home. There are several ways to improve your credit score, so if your credit score isn’t at least a Good score, it’s best to start working on that before you go any further in the loan process. One of the first things you should start doing to improve your credit is reduce your debt as much as possible.
Save Money for your Home Loan
A lot of time trying to save money is easier said than done. But that doesn’t mean you can’t try to save what you can. Having a higher down payment is extremely important when you’re looking for a home loan. The ideal amount for a down payment you’ll usually see flying around is 20% down of the overall loan, but that isn’t always the case. The closer you get to that 20% down payment, the more likely it will be to get the home of your dreams. You will need at least 5% down if you want any kind of loan whatsoever. There are some alternatives though, like the VA loan for veterans.
Interview Home Loan Lenders
Your first choice isn’t your only choice. Yes it’s hard to be patient when looking for a home. It’s a process that takes months, but slow and steady wins the race when it comes to the ideal home, and the ideal lender. Talk to several different lenders at several different sized banks. The rates are extremely competitive, and chances are you can save hundreds per month. If you can find the right lender. Again, patience is the key here. Interview as many as you lenders within the amount of time you have, compare all the rates that you will be given, and then go from there.
Get Pre-Approved on a Home Loan
Pre-approvals help narrow down your loan options. With each lender you interview, you’ll be able to apply for a pre-approval with them. Pre-approvals are a good way to indicate the size of the budget that you’ll be able to work with, along with what potential lenders you can work with. For example, if you are pre-approved for loans $300,000 or lower, but not $400,000 or higher, your home cost will have to be under $300,000. For more details, speak with a Paramount Mortgage Banker.
Know the Loan Amount
Knowing is half the battle, and this includes how big of a loan amount you’re looking for. Many who are looking for a loan amount typically have too wide of a price range from lowest to highest. It’s best to narrow this down. Once you have a rough idea of what your ideal loan amount is, it is easier to build an overall monthly budget. Be sure to factor in local monthly taxes and Mortgage Insurance if you’re not going to provide 20% down.
Getting a home sometimes will seem more complicated than it should. Luckily, Paramount’s Mortgage Bankers make the process feel as seamless as possible, saving you time, money, and sanity. Reach out to a Home Loan Expert today and let’s get you the home of your dreams.