What you Need to Know when Shopping for a Mortgage

If you are eyeing North Central Indiana homes for sale, you may be ready to begin the process of finding a mortgage program that is right for you and your budget. In fact, most realtors will request that you look into financing and home loan programs before you begin your search for North Central Indiana homes for sale.

If you wish to begin the hunt for homes for sale, you will need to first be preapproved for a mortgage, and you will want to find a home loan program and financing terms that work best for you. Although you may be excited at the prospect of looking at homes, it is important to take the process slowly so you can be assured you will find the home loan that is best for you.

Here’s what you need to consider when shopping for a home loan program:

Always remember the importance of a good mortgage. In fact, the time you take to find a good home loan program may be just as important as finding the right homes for sale. Remember that the loan program you choose will stay with you for many years to come, and that the interest rate and terms of the loan will also stay with you.  The one thing you want to avoid is choosing a loan program that doesn’t best fit your financial needs. Your home is likely the largest investment you will ever make, so make sure your loan program works well for you.

Before shopping for homes, it is best to obtain a mortgage pre-qualification letter. You can easily get a prequalification letter by contacting a lender and providing them with information regarding your income, debts and assets. The prequalification letter will let your realtor, and the seller’s realtor, know that you are able to afford North Central Indiana homes for sale up to a certain amount.

A preapproval from a lender is also an important process, as it is more formal than a prequalification and involves the approval from the lender regarding a home loan.

Don’t simply assume all loan programs are the same. In fact, there are numerous home loan programs, including conventional loans, FHA loans, VA loans and USDA loans. It is always best to research your options so you can be sure you are choosing the loan that best fits your needs and the price of the home you want to purchase.

Consider the loan repayment terms. There are fixed-rate loans, which are loans that offer a fixed rate (and therefore a fixed monthly mortgage payment) for the life of the loan. There are also adjustable-rate loans (commonly called ARMS) that feature interest rate changes throughout the life of the loan. Your home loan can be anywhere from 15 years to 30 years.

Finally, before shopping for North Central Indiana homes for sale, consider the interest rate paid on the home loan. Just like any other industry, the interest rates offered between companies can vary widely. It is therefore quite important to understand the current interest rates offered by your local lenders. Also included in the loan’s interest rate is the number of points. Points are essentially pre-paid interest, and many lenders charge points as a way to offer lower home loan rates.

Richard Soto

DISCLAIMER: Neither Indiana VA Mortgages (IndianaVAmortgages.com) nor NEO Home Loans is affiliated with any government agencies, including the VA.