How To Obtain A Home Mortgage Loan
Knowing how to obtain a home mortgage loan allows you the necessary financing to purchase a new home. Given the choices of home mortgage programs and lenders available, obtaining a new mortgage loan may seem confusing. Familiarizing yourself with the mortgage loan process ahead of time can reduce the stress you may feel when faced with the prospect of applying for a new loan. This makes the home buying experience much more enjoyable.
- Check your credit scores. You can obtain your FICO scores-the scores that mortgage lenders review-direct from the Fair Isaac Corporation by visiting myFICO.com. Unlike credit reports, you aren’t entitled to a free annual credit score. Thus, you must purchase your FICO scores in order to review them. The higher your FICO scores, the better interest rate you can expect to get on a home mortgage loan.
- Evaluate different home mortgage loan programs that you may qualify for. An FHA home loan allows borrowers with less than perfect credit to purchase homes and make only a 3.5% down payment toward the home mortgage loan. VA loans allow active or retired military members and their families to purchase homes without a down payment. You may even qualify for a first-time homebuyer loan.
- Decide how much money you need to borrow toward your home mortgage and set aside a down payment. The amount of your home mortgage loan determines the amount of a down payment you need to make. Your down payment may vary depending upon the loan program you choose. Conventional mortgage loan programs often require mortgage loan applicants to supply ten percent or more of the loan amount toward a down payment.
- Shop around for a mortgage lender to supply your home mortgage loan. Visit different banks and credit unions in your area and ask for mortgage interest rate quotes. This helps you choose a mortgage lender based upon the amount of interest each lender charges to grant you the home mortgage loan.
- Choose a lender for your home mortgage loan. Fill out a formal application and wait for your new mortgage lender to either approve or deny your application for a home mortgage loan. Should the lender approve your application, it will inform you of the amount you qualify to borrow and you can begin the exciting process of shopping for a new home.