When it’s time to finally settle in your own home, one of the most popular options you’ll consider for financing is a mortgage. One thing to note is, once you take the home loan, you’ll be in the repayment for the long haul.
It’s best, therefore, to ensure you take the right loan for your needs and situation.
Here are seven steps that will help.
#1 Decide the loan structure
The loan structure should properly fit your financial needs and carry the features you are really looking for. You need to decide these aspects before going out to research the loan market.
Think about a loan that is structured to be easily manageable. Be sure to look past the interest rates into other features when deciding the loan structure, it’s the only way to ensure it won’t frustrate you for the next couple of years.
#2 Research your prospective lenders
With so many loaners in the market today, you’ll be spoilt for choice. Gather as much information as you can about your prospective lenders to determine the right one for you.
You could cruise their websites such as Home Loans for All or get referrals from people who have dealt with them before. Word of mouth should be a much reliable source of this kind of information.
#3 Compare rates and terms
Once you’ve decoded the kind of loan structure you are looking for and researched the market to identify a few potential lenders, your next step should be to make comparisons to see who is offering the most agreeable terms and interest.
Compare rates from multiple mortgage lenders to ensure you gather the best information.
#4 Evaluate the true cost of a loan using comparison rates
Ideally, you want to know how much you are paying for the home loan you are taking and how it is going to affect you, comparison rate figures are a good place to start.
Comparison rates are designed to help you identify the true cost of your loan by reducing the interest rate, loan fees and other charges to a single percentage figure. This should be easy to determine once you have the loan structure figured out.
#5 Seek pre-qualification
It is important to get your mortgage pre-qualification letter before you go shopping for a home. This may be as easy as calling your bank and answering a few questions related to your income, debts, and assets.
You’ll also be required to describe the kind of property you’re looking to buy.
#6 Get pre-approval
Unlike pre-qualification, the loan preapproval should come after you have put an offer out on a property that you intend to buy. To make this process smooth, ensure you have smoothened out your credit profile because the bank will run your credit once you submit your mortgage application.
Suppose everything checks out, you’ll have your pre-approval for the home loan.
#7 Read the fine print
Just before closing, you will want to pay close attention to the written requirements and fees associated with your loan before appending your signature on that dotted line.
Whether you’re a first-time homebuyer or a repeat one, you need a loan that accommodates your individual and financial circumstances. Following these steps should help you get the ideal home loan for you.
So have you settled down and started looking for a home loan?