The Secret To Finding The Best Mortgage LoanPosted by Nick Niesen on October 29th, 2010 As you apply for a home loan or look to refinance your home, it is important to understand your situation and how it will be affected by the type of loan that you will be applying for. But first, it is important to find out why you need the loan. For instance, do you need it for a home loan. The next step is to do your research in order to escape the headaches and hassles that plague the home loan process. During this process, you should consider two major factors: How much you can afford and how to compare the different lending companies. Let?s take a look at each? How much you can afford: The most important factor to getting the right kind of mortgage loan is to know how much you can fit into your budget. That way, you can ensure that you are staying within the proper budget limit. When calculating the affordability factor, it is important to take into account these three factors: Income- The key is to know how much you make each month in relation to a mortgage payment. The rule of thumb is that the payment should not exceed 27 percent of your total income. Debt- Obviously the less debt you have, the Down Payment- A house that requires a large down payment will require you to spend more money upfront. In some situations, you can spend up to 20% of the selling price with 3 to 6% in addition for closing costs How to compare mortgage loans: In addition to considering your finances, it is important to carefully research the various lenders that are available to consumers. Here are just a few factors to take into consideration: Compare lenders at the same Interest rate and lock in period. That way you will be able to properly compare the different lenders Once you have compared both of these factors, you should find the one that has the best rate By understanding the home loan process and what type of loan is right for you, it will simple to get the best possible home loan. Like it? Share it!More by this author |