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Home loan down-payment.As a general rule of thumb, lenders will be seeking contribution from you of around 3% to 6% of the total loan value. This can be negotiable, and there are many loan packages available.Fixed interest rates versus adjustable rates.The two most common loan products available for home mortgages are fixed rate versus adjustable rate. Fixed rate means that you agree on an APR (annual percentage rate) that does not change through the life of the loan, whereas, an Adjustable Rate Mortgage, better known as an ARM, means that rates and monthly payments can change, often tied to the U.S. Government Treasury Bills or some other form of index, with the frequency of change dependent upon the terms of the loan. Deciding on which way to go involves many variables. We suggest that you start by examining the fixed rate products available on the market. They are by far the most popular, and arguably with the least amount of risk. |
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Loan Amount Qualification, IncomeThis can vary widely depending on you, your lender, and many other variables. However, as a rule of thumb, look at 2 to 2 ½ times your current household income, as a baseline to determine how much you can afford to borrow.Loan Amount Qualification, ExpensesThis is another broad category that varies from one lending institution to the next. However, there are two general factors to look at, and they are Housing Expenses (such as mortgage, property taxes, and insurance), and long-term debt (which can include credit cards, auto loans, etc.). First, add all your expenses together. As a rule of thumb, you will want your expenses to not exceed 33% to 36% of your gross household income. Second, examine your housing expenses only. As a rule of thumb, you’ll want these expenses to not exceed 25% to 28% of your gross household income. |
Discount Points – Discount Points are most often charged in association with a lowered interest rate. In other words, the Discount Points represents a dollar amount, as a fee for giving the borrower a lowered APR (lower than what the lender might otherwise charge).
For some of you, this avenue may offer exactly what you’re looking for. It’s important to know that lenders who specialize in sub-prime loans are out there and want to earn your business. However, we advise that you proceed with caution. Be sure to gather sound advice from trusted friends and professionals, and understand all the risks versus rewards, prior to signing on the dotted line.
Short-FormsThe most important thing you can do as a consumer of loan products is to shop around and get several preliminary loan quotes for your consideration. These are no risk, no obligation, preliminary loan offers. They take 30 seconds to 2 minutes to complete, they require no personal or confidential disclosure on your part, and they require no commitment from you.We suggest that you obtain 3 or 4 offers. You can then examine and compare the terms, rate, fees, and all other pertinent information about the loan product, and the lender, at your leisure and in the comfort of your own home. LoanResources.Net has categorized hundreds of online services that you can explore. You can also go to any search engine and find them from there. Look for a “privacy policy” on their website, as well as short, simple application forms that make sense and are relatively easy and quick for you to complete. Also, take a quick look at the current interest rate for 30 year fixed loans, as well as the 6 month trend graph. We have set up a free webpage with this information, or you can find many graphs and charts via your favorite search engine. We’ve enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, but never turn your back on your own common sense. |
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