10 Home Loan Tips That Could Help You

Use a mortgage calculator

Mortgage calculators can help you get an estimate of what your monthly loan payments would be, based on different down payment and interest rates, and home prices.

Get pre-qualified

Several real estate agents prefer working with individuals who are pre-qualified for a loan. Getting pre-qualified helps you better understand what price range of homes you can afford and the amount you can borrow.

Keep your credit score healthy

The lender may check your credit report a second time before closing the loan, making it important for you to keep your credit score healthy during the loan processing. Ensure you don’t apply for a new credit card, pay your bills late, or take out a new car loan until your home loan is closed.

Save for a down payment

Your down payment may range anywhere between 2.5% to 20% of the home’s purchasing price, based on your lender and the loan type.

Check your credit score

Knowing your credit score can help you get the best deal on your home loan, so get a copy of your credit report before starting the home buying process. If your score is not good, consider taking steps to improve it.

Know the loan options available

Fixed-rate loans have a predictable amount to pay every month, while adjustable-rate loans offer lower initial payments. Understand which one suits your financial situation better.

Compare offers

To choose the loan best suited to you, compare the difference between the loan offers based on interest rates, fees, and other components that make up a mortgage.

Track interest rates

Tracking interest rates is important as they change almost every day and play a crucial role in determining the cost of your mortgage.

Gather your financial documents

You’ll need to provide several documents to your lender. At a minimum, gather documents like your last recent W-2, last two pay stubs, current brokerage and bank statements, and last two years’ tax returns.

Respond to your lender promptly

Respond to your lender promptly and avoid returning paperwork late to prevent lags in closing the loan, or even losing your dream home.