Shopping for the right mortgage is an exciting and important time! There are many mortgage loans out there, and even more lenders. So how do you choose? Read on to learn how to select the best mortgage offer for you.
Figure Out How Much You Can Afford
A home is a big purchase, so you want to be sure you’re borrowing an amount that you’re going to be able to afford. You can use many mortgage calculators online, but keep in mind that the higher your credit score, the more a lender is willing to loan you. This doesn’t mean you should increase your housing budget. You’ll need to make a monthly mortgage payment, and the more you borrow, the higher the payment will be.
Choose the Right Type of Loan
There are several different types of mortgage loans available. Here are a few:
- FHA Loans: These are helpful if you have a low credit score.
- VA Loans: If you or your spouse are in the military, this is an option.
- USDA Loans: If you’re purchasing a home in a rural area.
Talk to a real estate professional to learn more about which loan is the best option for you.
Understand Interest Rates
The interest rate you’ll be paying on your loan is a significant factor in choosing the right mortgage. Interest rates can change, but you can lock in an interest rate depending on your loan. An adjustable-rate mortgage, or ARM, is a popular option for buyers that plan to move, refinance, or pay off their mortgage before the guaranteed rate expires. However, a fixed rate is generally preferable for those purchasing a “forever home”.
Do you have any questions about different mortgage loans? Give us a call!