You’ve decided its time to purchase a new and you’re ready to start this exciting process. But before you can even think about making any offers, you need to get prequalified for a mortgage. Here’s what you need to know about getting prequalified for a home loan.
What Do I Need a Lender For?
When you’re buying a home, there’s no doubt that the process can get overwhelming quickly. But what really makes it run smoothly is a good lender. So what does a mortgage lender actually do? They help you get pre-qualified for your loan, making your home search much simpler and saving you from any unpleasantly large surprises along the way. They’ll also work with you throughout the entire process to ensure you get the best rate and terms. It’s important to note what all of this will cost – typically, lenders charge anywhere between 1-3% of your total loan amount as a fee. However, the assistance they provide can often be invaluable; their expertise is just what you need to make sure everything goes as smoothly as possible.
How To Go About Getting Pre-Approved
Going through the pre-approval process is often the very first step of the home buying journey. But what do you need to get pre-approved and what’s it all about? It’s actually not too daunting, and you might even find getting all your ducks in a row can be surprisingly quick. In order to go through pre-qualification, you’ll need some basic documentation like your credit score, pay stubs, and W2s. With these few pieces of information in hand you’ll be on your way to finding out how much home you can afford. The great news is there are companies who make applying for pre-approval easy and fast…so what are you waiting for?
How to Choose a Lender
Figuring out the right lender to get prequalified with can look like an overwhelming task. The best place to start is by doing some research and looking for lenders who have honest and trustworthy reputations, as their customer service will be a big indicator of the overall experience you’ll receive. Positive customer reviews can help narrow down your choices, as these reviews are typically dependable sources of third-party insights into how the lender works. Ultimately, look for a lender that has been operating responsibly and is dedicated to providing its clients with simple solutions — then you know you’ve made the right decision.
Fixed Rate Versus Adjustable Rate Mortgages
Shopping around for the right mortgage is a great way to save money down the line – but what’s the difference between a fixed rate and an adjustable rate mortgage? Fixed rate mortgages are what they sound like: Your interest rate will stay the same through your entire loan repayment period. This means that, come rain or shine, you won’t have to worry about what could happen if rates go up or down.Â
On the other hand, adjustable rate mortgages (or ARMs) mean that your interest rates can fluctuate during your loan period. Depending on what happens in the housing market, you may end up getting hit with higher payments – so it’s important to know what kind of risk you’re taking when getting pre-qualified for a loan.
What Types of Mortgage Programs are Available?
If you live in Maryland, you have even more options available to explore for mortgage programs. Fret not if your financial situation doesn’t seem as favorable – there are types of programs that can help get you into the right house with ease. For starters, there’s assistance for down payments, closing costs, and even mortgage payment terms available for those who meet certain criteria. Plus, there are programs to help pay off student loans. There are also programs specific to counties / cities that you would purchase the property in, so make sure to do your research prior to making an offer, as you never know what may be out there for you. Don’t let your debt hold you back from exploring all of the different types of mortgages and programs Maryland has to offer!Â
Different Types of Loans
When it comes to buying a home, there are many different types of loans available to potential homeowners. Both FHA and VA loans require lenders to meet certain requirements, so buyers should make sure they understand what each of those means before making any decisions. Ultimately, buyers will want to research their options thoroughly before deciding which type of loan is right for them.
FHA Loans
Offers more relaxed credit requirements, and typically lower down payments than conventional mortgage loans.
VA Loans
Provide veterans and service members with specialized loan terms and options that they can take advantage of- such as not requiring a down payment.
Getting Pre-Approved: Final Thoughts
A mortgage is a big decision and working with someone who has your best interest in mind is crucial. When interviewing different lenders, be sure to ask about their experience, what type of programs they offer and what kind of rates they can give you. Also, don’t forget to figuire out if a fixed or adjustable rate mortgage makes more sense for you. We hope this guide has given you the information you need get started on your home buying journey!