HOME FINANCING IS…
a monumental decision that should not be taken lightly. But with all the options for mortgage loans available today, and with so many lenders competing for business by offering something unique, deciding what to do can make even the most experienced investor’s head spin. Whether a buyer is looking for first time home financing, foreclosure financing or one of the many other available options, it is best to go through the decision making process well-informed and with as little out-of-pocket expense as possible.
For investors who want to be more informed and prepared for the complicated house financing process, obtaining a free mortgage loan quote can be the answer. Getting a free mortgage quote is easy with online services that RealtyTrac also provides. RealtyTrac’s fast, simple and secure online forms match specific loan needs with one of the company’s local mortgage partners to provide buyers seeking first-time home financing, and investors, with competitive options for new home, home equity or home refinance loans.
HERE IS A BASIC STEP-BY-STEP GUIDE TO HELP THE HOME BUYER THROUGH THE PROCESS:
Location – To start with, an investor or home buyer should have some basic information regarding the property such as the city, zip code and state they are interested in. This is important because different cities and states have their own policies regarding home financing. Generally speaking, most investors already have an area in mind that fits their specific investment needs and strategy. Likewise, home buyers typically have an area in mind where they would prefer to live.
Current Property Value – Basically, before even considering home financing the buyer or investor needs to know how much the home is worth in the current market. It is helpful if the buyer or investor has a basic knowledge of what the average home prices are in the area and how much home they can afford upfront before pursuing the purchase of any particular property.
Desired Loan Amount – This is the amount the buyer or investor hopes to receive from the lender when the house financing process is completed. The amount could be the same as the property’s value if the buyer or investor is looking for 100 percent financing, or less if the buyer/investor already has enough money for a down payment.
Loan Purpose – It is important to know what the loan purpose is before seeking home financing. Whether it is a purchase or refinance, first time home financing or foreclosure financing, there are different loan options available depending on what the purpose of the loan is. By gathering this information, the loan quote is much more accurate and better suited to the buyer or investor’s needs when exploring home financing options.
Occupancy – It is important to know whether the property being financed will be owner-occupied, a rental property, investment property or a residence for an extended family member or a second home for vacation purposes — among other possible scenarios. This is because there are loans designed depending on who is going to occupy the property.
Credit Rating – Whether a buyer or investor, anyone seeking house financing should have a basic knowledge of what kind of shape their credit is in upfront. One’s credit rating is affected by such things as the timeliness of credit card and loan payments, debt to credit ratio, and the length of time the buyer or investor has had credit. It can be classified as excellent, good, fair or poor. The better the credit rating, the lower the interest rate will be on the loan.
Points or Pre-paid Interest – Also known as a buy down, this is a lowering of the interest rate on the loan and is usually temporary for the first few years of home financing. It can be very helpful for lowering payments in the first few cash-strapped years of homeownership, especially in a first-time or foreclosure financing situation.
Loan Programs – Most quotes will offer the buyer or investor a few loan choices for comparison. A 30-year or 15-year fixed rate loan guarantees the buyer the same interest rate for the life of the loan. A 3/1, 5/1, or 7/1 adjustable rate mortgage, on the other hand, adjusts the rate upward after the initial three, five or seven years of the life of the loan and then usually adjusts once a year thereafter for the life of the loan.
Buyers or investors who go to a lender prepared with the proper information stand a better chance of getting the loan they need approved, leading up to a better home buying experience overall. Therefore, a buyer or investor should try a few different options when filling out the online form for a free quote in order to be well aware of what the lender is offering when it’s time to sign on the dotted line.