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10 Secrets You Should Know When Getting A Home Loan

There are various types of home loans available in today's financial market and each one comes with its own rules and regulations. Below the 10 secrets you should know when getting a home loan.

1.Know About Various Types of Home Loans
The competition in the loan market is rising day by day. Nowadays there are numerous loan packages which suit almost every budget. Some of the major loan types include:
One Month ARM's
Five Year Fixed ARM's
15 Year Fixed
30 Year Fixed
100% Home Equity Loan
VA Home Loans
Zero Down Payment Mortgage Loans

2.Select the Right Home Loan
Make sure you select the right home loan for you as there are so many home loans available on the market today. Don't apply for a home loan from the first loan company you meet, thinking that they are offering the lowest interest rates. Before applying for a loan, make sure that the loan is appropriate for you needs.

3.Down Payment
As a general rule of thumb, the majority of the loan providers will be seeking contributions from borrowers around 3% to 6% of the total loan value. As the competition in the home loan sector is increasing day by day, you can easily negotiate and get the right package for you. Make sure that you are selecting the right one.

4. Adjustable Interest Rates Versus Fixed Interest Rates
Adjustable interest rates (variable interest rates), means that your interest rates for home loans will vary (increase or decrease) depending on the existing interest rates in the financial market. Fixed interest rates means that your interest rates will be fixed until the end of the loan period. On the other hand. Before you apply for a home loan decide on which interest rate is the best one for you, that is whether you need a fixed rate or one which may decrease or increase each month.

5. Annual Percentage Rates (APR)
Annual percentage rates (APR) consist of principle, interests, fees, and all other costs related with the loan. Comparing the APR of various loan providers will help you to select the loan which best suits your budget.

6.Compare Home Loan Features
Make sure that you have compared the home loan features. The majority of home loan customers exclusively compare interest rates, it is essential to compare home loan features as well. Keep in mind that, the more flexible your home loan is the higher the interest rates. A variable interest loan permits one to withdraw against repayments or offset savings against the loan, will also have a higher interest rate when compared with a standard home loan.

7.Think Whether You Need a Redraw Facility
A redraw facility allows borrowers to make additional repayments on a home loan, and then have access to the additional repayments they paid earlier. However, these facilities are normally available only on Standard Variable loans which feature a higher interest rate than ordinary home loans. Think twice before applying for a loan with redraw facility as it is a little more expensive.

8.Loan Amount Qualification (Income)
This can differ according to you, your loan provider, and several other variables. However, as a baseline to decide on how much you can afford to borrow, have a look at two or three times your current household income. This will tell you how much of a loan you qualify for.

9.Loan Amount Qualification (Expenses)
To decide upon the loan amount expenses, take the sum of all of the housing expenses and long term debt. Make sure that the expenses don't exceed 33% to 36% of your total household income. The next step is to examine your housing expenses. Make sure that the expenses do not exceed 25% to 28% of your total household income.

The majority of loan providers need to take a look at your employment history so as to make sure that you have a steady and stable income.

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2 komentar:

Lana Lang said...

tanks for your info

Samantha said...

good job

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