Step by Step Guide to Choose a Home Loan – Guest Post
Are you considering buying your own home? If your savings are still not adequate for the purchase, applying for and getting a home loan would be for you. There are numerous home loan products that are offered across the market. This is to your advantage because you could choose the best one with the most competitive rate. But the existence of numerous loan providers may also make the choice more confusing.
Are you anxious because you have no experience finding and obtaining a home loan? Here is a step by step guide when choosing a home loan.
1. Do some research to obtain knowledge about home loans including interest rates and repayment options. You do not intend to immediately grab the first home loan product that comes your way, do you? Proper and sufficient knowledge about lending products will equip you to make an informed decision.
2. Consider the amount of deposit you could afford. Home loans would lend you up to 80% of the house purchase amount. It is a standard practice to pay the remaining 20% as down payment. There are other lenders that offer to cover most or the entire amount (100%). However, such options would require costly mortgage insurance on your end.
3. Find a good loan provider. There are many non-traditional loan providers that compete against banks. Your choice is wider. You need to be wiser. Choose the right loan provider not just based on feedback but also based on the products offered.
4. Do some comparison shopping. It would be best if you would make a shortlist of the right lenders. Contact each loan provider to ask for quotes. This way, you could tabulate the home loans and make an appropriate comparison to clearly and easily compare interest rates and other costs. Focus on products with the lowest rates and charges. Also consider the terms of loans.
5. Contact the loan providers you shortlisted. Have them explain the terms and conditions of the home loans they offer. Be attentive when fees and charges are discussed.
6. Find a home loan that would enable you to make additional payments at no added cost. You should intend not to strictly stick with minimum payments required. Paying bigger amortizations than required is one way to shorten the maturity of home loans.
7. If you are still confused and unsure, it is better to consider hiring a mortgage broker. The professional would guide you in every step of the way towards finding and choosing the best home loan from the best loan provider. He could even represent you in negotiations for better rates and terms.
Now, you are ready to take a home loan. Start the application process and get an approval before going out to find and buy a property you could acquire. This is to make sure you have an ample amount of funds to finance and buy the house you want for yourself and your family.
Andrew is a contributing writer for several personal finance blogs. When he is not sharing his knowledge online, Andrew helps people with home loans and refinancing solutions at ALC.