April 8, 2018
Understanding The Various Loan Options
Depending on your lender and the type of loan you choose, your required down payment can range from 2.25% to 20% of the purchase price of the home. Establishing a monthly budget will help you put away enough money for your down payment. Once you’ve assessed what your budget will support, consider having money automatically deposited from your paycheck or bank account to a savings account to make it easier and more convenient to put aside money each month. The Associates Home Loan of Florida offers loan options to you including self employed loans. An account like Discover Bank’s AutoSavers Plan can help you start saving today. If you won’t be able to come up with a large down payment, then you should look into an FHA loan, which helps home buyers who can only make a small down payment.
How to take out a home loan
You know home loans hit a 14-year low as rates had risen on April 25, 2014. The mortgage industry’s output of new loans is at the lowest point in 14 years, according to estimates from a trade publication. Inside Mortgage Finance said Thursday that even in the depths of the financial crisis, mortgage lenders were busier than during the first quarter of 2014. One factor is the end of a refinance boom as interest rates have risen well off their record lows. But though the rates are still great by historical measures, mortgages written for home purchases have been weak as well, as sales of new and previously owned homes have slowed.
Use a mortgage broker
The traditional mortgage process involves approaching three home loan lenders, listening to them spruik their products and then choosing the most attractive offer.This is time-consuming and – unless you’re a finance expert – can be very confusing as well.
That’s why more than half of Australians now use mortgage brokers, middle-men whose job is to help a borrower organise a suitable home loan with a lender.Brokers are home loan experts, so theyunderstand the mortgage market’s complicated rules and baffling jargon.
Mortgage brokers generally work with anywhere from 10 to 40 lenders – far more than the three you might visit on your own. That means you’re exposed to a far wider variety of home loan options.
Another advantage of brokers is that they generally won’t charge you for their services. Instead, they’ll charge the lender (in the form of a commission) if they end up organizing a home loan for you.
However, there are also several downsides associated with mortgage brokers.First, there are about 150 mortgage lenders in Australia, which means you’ll get exposed to only a minority of options if you organize a home loan through a broker.Second, some unscrupulous brokers might steer you to a particular home loan not because it’s in your best interest but because it pays them the highest commission.
Go direct to lender
Some people prefer to take full control over the home loan application process rather than outsource it to a mortgage broker whose motives or competence they might not trust.But a word of warning: while going direct-to-lender might give you greater control and you can apply for a hard money loan. Some bank employees can’t be relied on to give independent advice. That’s because their job is to promote their own products, not to tell you about better options from a rival provider.If you do decide to go direct-to-lender, make sure you do your research before deciding on your home loan provider of choice.You might be tempted to automatically pick your current bank. However, there are about 150 banks, credit unions, building societies and non-bank lenders in the mortgage market – so the odds of your bank having the most suitable home loan for you are actually remote.
And also the mortgage industry’s output of new loans is at the lowest point in 14 years, according to estimates from a trade publication. Inside Mortgage Finance said Thursday that even in the depths of the financial crisis, mortgage lenders were busier than during the first quarter of 2014. One factor is the end of a refinance boom as interest rates have risen well off their record lows. But though the rates are still great by historical measures, mortgages written for home purchases have been weak as well, as sales of new and previously owned homes have slowed.
Get your financial documents in order
When you apply for a mortgage, you will need to provide your lender with a number of financial documents. Having these documents already assembled will help accelerate the processing of your loan application. At a minimum, you should be prepared to provide your last two pay stubs, your most recent W-2, your last two years of tax returns, and current bank and brokerage statements.