From researching neighborhoods all the way to closing, we can guide you every step of the way — and that includes sharing tips on things to consider as you shop for the right mortgage loan.
Your home is a huge investment and your mortgage terms can affect your budget for years to come. Below are a few things to consider as you shop for the best loan for your needs. Keep in mind, these are just suggestions. Speaking with a mortgage professional is the best way to get a clear picture of mortgage loan options, down payments and more.
Check Your Credit Score
Your credit score can directly impact what mortgage loans and interest rates you may be eligible for, so work on getting it as high as you can before starting to shop around for a home. You can request a copy of your score through one of the three major credit bureaus: Equifax®, Experian® or TransUnion®.
Create a Budget and Start Saving for a Down Payment
There are several costs built into purchasing a home. The biggest expense to start planning for may be your down payment. While there may be loan programs with little to no down payment, many mortgage loans will require you to put down at least 20% of the total price of the home if you want to avoid additional monthly fees and expenses. The larger your down payment, the more of your home you will own from day one, providing you built-in equity!
Once you’ve started saving for your down payment, you may want to assess your budget to determine what you may be able to afford. Online resources and tools, such as mortgage calculators, can help give you an idea of what your mortgage payment might be based on the hypothetical amounts you enter for the loan amount, down payment amount, interest rate, loan term, taxes and insurance.
Consider Other Expenses
Keep in mind there may be other expenses you’ll incur throughout the home buying process, such as inspection, appraisal and closing costs. In addition, there may be additional expenses once you close on your new home, such as furniture and appliance purchases or landscaping.
Determine Your Mortgage Repayment Term
As part of shopping for mortgage loan options, you will need to determine your mortgage repayment term, which are commonly set at 15, 20 or 30 years. You will also need to choose a fixed or adjustable interest rate. Adjustable rate loans may provide lower initial rates, but can rise over time depending on market conditions. With a fixed rate loan, your rate will stay the same over the course of your mortgage loan.
Resource Guides courtesy of RUOFF Mortgage
Ruoff Mortgage knows that researching and educating yourself is the first step towards making any big decisions. Buying, selling, or refinancing a home will be some of the biggest decisions you'll make, and we want you to feel prepared and confident when the time comes. We have guides for every stage of the process with detailed explanations of what you should expect, and worksheets to help you plan for your home ownership dreams.Click Here
Get Pre-Qualified or Pre-Approved for a Loan
The terms pre-qualified and pre-approved may be used interchangeably or inconsistently by various mortgage professionals. More important than what the mortgage professional calls it, is what the mortgage professional reviews in order to provide it to you. Getting either pre-qualified or pre-approved for a loan may give you a better estimate of a loan program you may qualify for if certain conditions are met and based on the level or review by the mortgage professional.
Obtaining either a pre-qualification or pre-approval tends to show homebuyers and their real estate agents that you are serious about buying a house, which may help make your offer more appealing. To get either pre-approved or pre-qualified, your mortgage professional will assess your credit history, current income and debt situation. Once completed, they can give you an estimate of how much you may be able to borrow, which is subject to certain conditions and final loan approval. Once you’ve been pre-qualified or pre-approved for a mortgage loan, you will know how much you can spend and you can begin the search for the perfect home!
Seek Final Loan Approval
After your offer has been accepted, you will submit financial documentation, such as pay stubs, tax returns and bank account statements to your mortgage professional to seek final loan approval. At this time, the mortgage professional can schedule an appraisal to ensure the home is valued at least at its selling price. You may also want or be required to obtain a property inspection to assess the condition of the home prior to purchase. Once the appraisal and inspection are complete and the final loan approval is obtained, it’s closing day — and the home is officially yours!