The first thing a home financing lender will want to know is how much equity you are bringing to the table. Equity can be viewed in two ways; how much value to you have built up in your current home and/or how much cash or cashable assets do you have available for a down payment. Learn how to develop your Financial IQ, free by clicking here.
If you’re currently looking for a home financing loan there are a few things that you need to take into consideration to ensure that you get a loan that fits your needs. You don’t want a mortgage that feels like a financial anchor because this will not allow you to enjoy your new home. Your home should feel like a home, not a drain that takes everything you have to pay for.
First time home buyers are, by definition, new at understanding how home financing works. There are a number of mortgage programs in the marketplace which are far less advantageous to the novice home owner than the fixed interest program. Some of these loans may increase far more quickly, or have far less favorable interest rate caps over the life of the loan. Sometimes mortgage lenders tempt first time home buyers with interest only loans. Imagine the surprise and shock of some of these buyers when they realize they have not been paying down on the principle of the loan, and have been paying literally ONLY the interest owed on the money borrowed. Sure, the payments are lower, but you are not actually gaining any equity position over and above home appreciation.
Some considerations of your credit ratings might be to deal with your current pre-existing credit history sensibly. Only use Thirty percent in the borrowing limit in any kind of plastic card and make sure you can pay off your own cards. Inquire your current charge card firm to help document this appropriate credit rating restricts for the credit agencies. Do not make big or wild expenditures that open upswings credit score especially about a few months prior to applying for home financing.
Lastly make sure to scout for as many banks before deciding the best home loan in terms of flexibility, penalties for early settlement or re-financing and of course the interest rates, flexible or fixed.