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# Top 10 Home Loan Tips + Mortgage pricing

Aug 31, 2021

  Buying  a home can be a fun and exciting experience. But finding the right home  is just one step in the process. Choosing the right home loan can be  just as important. Here are some tips to help make finding the right  home loan as easy as possible.  

Top 10 Home Loan Tips By LiveInsure

Tip #1 – Start saving for a down payment

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. 

Tip #2 – Check your credit score

Having  a good credit score puts you in a position to attract the best deal on  your home loan. So it’s a good idea to obtain a copy of your credit  report before starting the home buying process. You will see what your  credit profile looks like to potential lenders and can then take steps  to improve your credit score if necessary. 

Tip #3 – 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. 

Tip #4 – Utilize a mortgage calculator

Mortgage  calculators are great tools for helping you understand how much home  you can afford. They are very easy to use and can show you how much your  monthly mortgage payment would be under different home price, down  payment and interest rate scenarios. Check out a variety of our  handy mortgage calculators. 

Tip #5 – Learn how to compare offers

All  mortgages are not created equal. Even if loans have the same interest  rate, there could be differences in the points and fees that make one  offer more expensive than another. It’s important to understand all of  the components that go into determining the price of your mortgage, so  you can accurately compare the offers being made. You can click here for  a good explanation of the components of mortgage pricing. 

Tip #6 – Start tracking interest rates

The  interest rate will be one of the biggest factors in determining the  cost of your mortgage. Interest rates for mortgages change almost every  day and it is helpful to know which way they are heading. 

Tip #7 – Get pre-qualified

Many  real estate agents want you to be pre-qualified for a loan before they  will start to work with you. The mortgage pre-qualification process is  fairly simple, usually just requiring some financial information such as  your income and the amount of savings and investments you have. Once  you are pre-qualified, you will have a better sense of how much you can  borrow and the price range of the homes you can afford. 

Tip #8 – Understand the various loan options

Maybe  your parents had a 30-year fixed-rate loan. Maybe your best friend has  an adjustable-rate loan. That doesn’t mean that either of those loans  are the right loan for you. Some people might like the predictability of  a fixed-rate loan, while others might prefer the lower initial payments  of an adjustable-rate loan. Every home buyer has their own unique  financial situation and it’s important to understand which type of loan  best suits your needs. 

Tip #9 – Be prompt in responding to your lender

After  you have applied for a home loan, it is important to respond promptly  to any requests for additional information from your lender and to  return your paperwork as quickly as possible. Waiting too long to  respond could cause a delay in closing your loan, which could create a  problem with the home you want to buy. Don’t put yourself in a position  where you could end up losing your dream home, as well as any deposit  you may have put down. 

Tip # 10 – Don’t mess up your credit during the loan processing

It’s  not uncommon for lenders to pull your credit report a second time to  see if anything has changed before your loan closes. Be careful not to  do anything that would bring down your credit score while your loan is  being processed. So, pay all of your bills on time, don’t apply for any  new credit cards, and don’t take out any new car loans until your home  loan has closed.