New Home Mortgage
New Home Mortgage Loan
By Sam Ferdi
New Home Mortgage Loans
The reason to get a new home mortgage
Falling home prices coupled with lower interest rates have shaved hundreds of dollars off monthly mortgage payments, and that is luring buyers back into the market.
Getting pre-approved for home financing can determine the maximum home price and loan amount, based on your credit scores, income, and down payment. A mortgage pre-approval can save time and effort in your home search, and tells others that you are ready and able to buy a home.
Knowing what to ask when getting a new home mortgage.
- What documents do I have to prepare upfront?
- Will you pre-approve a loan for me?
- Can I get a side by side comparison of at least two different loans that might fit the bill for me?
- Does my loan have a pre-payment penalty?
- What is the yield?
- What is my payment, can it change? What is the worst case scenario?
- Do you guarantee your closing costs on a good faith estimate?
- How does my FICO score affect my loan rate and term?
- What if I plan to live in my house for one year? Will that change the rate? Is there a better way to structure this loan for a short term period of time?
- How often will you communicate with me on my loan?
- How long will it take to process and fund a loan with your company?
- Can I review my closing documents prior to closing?
- Can you give me a couple of names and phone numbers of your past borrowers to contact as references?
Things to consider:
o Interest Rates. Shop around and see what average home mortgage loan rates are and you can do that online which frequently has lower rates as well. Your home mortgage rate will affect how much money you have to pay back over the term of the loan, so the lower the better. The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes.
- Fixed or Variable Interest Rate. Before you apply for a home mortgage loan do some research on variable and fixed interest rates to find what will work best for you.
- Down Payment. Many times a home mortgage loan requires down payment between 10 and 20% of the price of the home, but if you have good credit sometimes you can make a lower down payment and still get a good deal.
There are flexible mortgage terms with a 30 year fixed rate that gives you a payment choice each month for interest only or a fully amortized payment, which could help when money is tight.
If you plan to keep your mortgage for less than five years, you may be able to save money on your payments with a 5 year fixed rate plan. Also consider financing your home with zero points.
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