If you are independently wealthy or a lottery winner you probably buy a house with cash. For the rest of us, you can still buy a home to enjoy for the rest of your life. The most common way to do this is to work with a lender to pay for this major purchase over a period of fifteen to thirty years.
Home lending is one of the finest American institutions. Lenders make home ownership possible for ordinary people of modest means to buy their homes. Banks and finance companies have come under criticism in recent years, and they have always been the focus of resentments from consumers. However, even when the complaints are justified, lenders provide an opportunity for home ownership that would not otherwise exist.
Getting a loan for real estate is a long and complicated process. There are a few things that lenders do to help consumers. It is in the interest of mortgage originators to help you buy a home; after all, lending is their business. Beyond providing the finances, lenders can assist you in numerous ways.
Pre-approval Is A Test Of Your Home Buying Seriousness
The first step in getting a loan application accepted by a bank is to get pre-qualified. Pre-qualification is getting your documents together and reviewed by a lender. Once this simple process is complete, you can talk to your bank about pre-approval, a more rigorous look at whether you can repay a loan.
Lenders want to help you get pre-approved because it demonstrates your potential, not just to them, but also to the whole market. Sellers and their Realtors will take you seriously once you are pre-approved and lenders are glad to help with that.
Improve Your Credit With Guidance From Lenders
What Credit agencies think of you comes down to the events in your life that lenders report. For lenders, your credit reports with the three main reporting agencies and your FICO score are the determinants of whether you can borrow money and how much interest you have to pay to do it. Even if a lender declines to make a loan to you, they will usually be happy to tell you how to improve your score and how you can get positioned to reapply.
Customize Your Loan To Your Situation
Options for homebuyers include the term length, usually either fifteen or thirty years. You will pay monthly for longer termed loan, but a shorter repayment term will cost less overall.
You have some freedom in closing costs because lenders can trade mortgage points as part of the cost. The more points you pay at closing, the cheaper the loan At the other extreme, your lender can give you points to make the purchase more affordable upfront. There are more elaborate options if you are in unusual circumstances. For example, buying a bargain that needs immediate refurbishment.
The key is to remember that lenders are in the business of making loans. There is unlikely to be a situation that they cannot work with, or that they have not seen before. Your mortgage broker or banker will be happy to explore the possibilities with you. If you are considering your home-buying options talk to a lender with the confidence that they want you to succeed, you will be glad you did.