A Short Discussion On Home Loans
Purchasing a home is a decision that can lead to financial security. However, financing is often a confusing process especially for first time home buyers. Obtaining information on the different types of home loans is one of the most important steps to getting started in the home buying process. There are many different types of products available.
First of all, credit score is an important indicator of what type of loan that you will be able to secure. Having a high credit score can enable you to get a lower interest rate or a higher loan amount. A lower credit score can seriously impact both your interest rate and the amount of money that you will be able to borrow.
Another key element in regards to financing a home is job stability. Generally, the longer that you have been in a job the more stable you are considered to be. Mortgage companies and banks will often require a person that is applying for a home loan to show paycheck stubs, bank account statements and tax information such as W-2's in order to guarantee income.
There are many stipulations to getting a home loan. Many times, the bank will offer a second mortgage that will have a higher interest rate and is generally shorter than the standard 30 year contract. Many people will do this if the current interest rate is lower than it was when the home was purchased.
For people that are in strong financial positions but do not have a big enough down payment then the possibility of securing two different loans from the bank or mortgage company might be an option. Be sure to read the fine print, because some time the second mortgage (which is the smaller of the two) will not be the standard 30 year time span, it can be any where from 5 to 15 years depending on the lender and the circumstances. A higher interest rate is usually applied to the second mortgage as well.
There are other types of home loans available. Some loans will have variable interest rates that go up and down each month depending on the market trends; therefore your mortgage payment will vary from month to month. There are also interest only loans.
Obtaining the best deal on home loans is something that homebuyers should strive for. Keeping track of your credit score and current financial situation can put you in a favorable position with lenders. Be sure to compare rates and products from various lenders before you sign any paperwork, because one lender might be able to get you a better deal in the long run.
First of all, credit score is an important indicator of what type of loan that you will be able to secure. Having a high credit score can enable you to get a lower interest rate or a higher loan amount. A lower credit score can seriously impact both your interest rate and the amount of money that you will be able to borrow.
Another key element in regards to financing a home is job stability. Generally, the longer that you have been in a job the more stable you are considered to be. Mortgage companies and banks will often require a person that is applying for a home loan to show paycheck stubs, bank account statements and tax information such as W-2's in order to guarantee income.
There are many stipulations to getting a home loan. Many times, the bank will offer a second mortgage that will have a higher interest rate and is generally shorter than the standard 30 year contract. Many people will do this if the current interest rate is lower than it was when the home was purchased.
For people that are in strong financial positions but do not have a big enough down payment then the possibility of securing two different loans from the bank or mortgage company might be an option. Be sure to read the fine print, because some time the second mortgage (which is the smaller of the two) will not be the standard 30 year time span, it can be any where from 5 to 15 years depending on the lender and the circumstances. A higher interest rate is usually applied to the second mortgage as well.
There are other types of home loans available. Some loans will have variable interest rates that go up and down each month depending on the market trends; therefore your mortgage payment will vary from month to month. There are also interest only loans.
Obtaining the best deal on home loans is something that homebuyers should strive for. Keeping track of your credit score and current financial situation can put you in a favorable position with lenders. Be sure to compare rates and products from various lenders before you sign any paperwork, because one lender might be able to get you a better deal in the long run.
About the Author:
Graham McKenzie is the content coordinator for a leading South African leading Home loans and Bond Origination portal which provides access to FNB Home loans.