Are You Prequalified by a Lender?

Visit your bank, credit union or a mortgage company with your compiled financial data in hand, to work out how big a loan you might be qualified for. The initial interview to discuss various types of funding should be free, and you will not be obligated to use this lender for your financing later. You may want to interview several lenders to find the best one for your circumstances. If you keep the process within a narrow timeframe, having several credit inquiries will not damage your credit rating; it is obvious to the credit-reporting agencies when they see several of the same type credit checks in the space of a few weeks. It would notbe wise to have credit checks run for other large purchases like cars or furnishings before you have made your home purchase, because these indicate you may be spreading your finances too thinly!

While you're comparing lenders, you will also learn about different kinds of home loans. While the thirty-year fixed rate mortgage is the old standard that your parents may have had, there are also 15-year fixed rate loans to consider. The shorter the term, the less interest you will pay - and the interest rate will probably be lower as well. Adjustable-rate "balloon" mortgages and even "interest-only" loans were popular during the boom years, but they have fallen from favor as home financing has become more conservative.

When you have found a lender who suits your needs comfortably, go ahead and start the formal process of qualifying for a home loan. Even more than a prequalification, this shows Sellers that you are serious about making the commitment to buy a home!

Payment Calculator

This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate.

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