So you have determined that you are ready to buy a home. You pay your bills on time, you have established a budget, you have a job that can be verified and has some security. That’s a lot to think about, isn’t it? Yes, but if you are not comfortable doing these things, you should probably wait to buy a home. It doesn’t mean that you can’t buy a home– just not now.
If you are searching for homes in Minnetonka, Eden Prairie, Chanhassen, Edina, or any place else for that matter, it will be in your best interest to be “pre-approved” for a mortgage. Why is this so important? Remember the ‘plan’ for buying a house in a previous post? Getting pre-approved will add to the orderliness of the home-buying process. This means that you will have already met with, or at least spoken to, a loan officer about your financial situation. A reputable loan officer will give you several options for financing, your credit score, and can offer guidance on how to improve your credit score if necessary. Remember, there are a variety of loans available depending on your individual situation.
So, what is a mortgage? A written agreement where the lender has an interest in the property until the money loaned to you, the buyer, is repaid under specific terms. If you do not repay the loan according to the terms, the lender has the right to take possession of your house.
And the best type of mortgage for you? It depends…Don’t you get tired of hearing “it depends” all of the time? Not all mortgages are the same just as not all buyers are the same. The best place to start is to simply ask yourself a few questions:
- How much do I have for a down payment?
- What interest rate will I be getting?
- How much will the mortgage be?
- How long am I planning to take to pay it back?
If you change any one of these points, it will affect the loan in some way. Additional mortgage information is available explaining how to determine what type of loans are available and which one might be the best for your situation.
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