Buying a new home often means confronting the challenge of refinancing and choosing the best package from a wide choice of products with varying interest rates and eligibility rules.
Many of us select a 30-year loan with a fixed interest rate, while others choose a 15-year option, which has a lower interest rate but higher monthly repayments.
Researching the home loan market, or using a mortgage broker, could save you thousands of dollars over the length of the loan.
Conventional bank loans are not guaranteed by government and will often feature a super-low 3% deposit to encourage first-home buyers.
Alongside these products, mortgages are also offered by the Dept. of Agriculture for rural buyers, the Federal Housing Commission and Dept. of Veterans Affairs. The last two agencies don’t require a deposit from applicants.
If you’re a first-time buyer, then you should check out all the State and city incentives to help you enter the market. You can combine the record-low interest rates that all American now enjoy with tax credits and assistance with down-payment and closing costs.
Some lenders will let you purchase “discount points”, which effectively allows you to buy a lower interest rate.
As an experienced real estate agent, I’ve lost count of the different kinds of loans I’ve seen my buyers and sellers use to meet their individual circumstances.
If you’re confused or concerned about the right loan for you, seek out professional advice from a mortgage broker or an accountant.
Always obtain a pre-approval letter. This letter from your lender can be used to give a seller and their agent confidence that you have a serious intention to buy. Once you’ve got that letter, it’s time to go shopping and find you a home!