Finance

How To Find the Best Home Loan

Looking for bargains on a home loan can feel daunting. Every bank is different, and the application process can take weeks to complete—not to mention the mountain of paperwork that comes with the querying process.

Filling out your mortgage loan application can seem like a hopeless task if you don’t approach the borrowing experience with a long view. The truth is, the borrowers who get the best rates on a home loan from their financial institution are the ones that come into the borrowing process with months of pre-planning already in place. To find the best rate on your next (or first) mortgage loan, you will need to start months or years in advance to begin creating the elements that will come together to ensure your future success.

Start with your credit.

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A home loan is essentially an investment made by a bank or other financial institution. The bank takes a percentage on top of the principal (the loan amount), which is adjusted based on your creditworthiness and borrowing history. To shift this equation in your favor, you will have to begin repaying any outstanding debts you already have well before a new mortgage loan application. Meeting the minimum monthly payments on a credit card, medical bills, or student loan debt won’t cut it either. To really make a mark, you will have to increase your monthly payment contribution to the balance.

Your credit score is based upon a series of factors. The majority of this mix revolves around your percentage of balances to the credit line and the monthly payments you make toward eliminating those balances. This means that making only the minimum payment will keep your credit score largely flat as each month goes by.

Building up a strong credit history in the year before you begin to look for homes is a great way to pin down a much more favorable interest rate when you approach lenders for a home loan. Of course, these added interest fees add up, too, so taking this seriously is the best way to protect your future cash flow. An interest rate that’s brought down by only a point or two can save you tens of thousands of dollars over the life of the loan.

Think about your family’s needs upon arrival in your new space.

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When you apply for a mortgage loan, you will need to consider the sale price and any additions you may need to bring the home up to the standard of comfort required of the structure. A home loan can be leveraged to conduct immediate renovations on a property. This is often exactly what new homeowners do as they finalize the buying process of their new home. Hiring a window contractor in Dallas, for instance, is a great way to improve your energy efficiency and security with a new set of windows.

Replacement windows can make a huge difference when it comes to blocking road-noise, keeping the perfectly conditioned air on the inside of your home, and cutting electricity costs over the long run. Using a contractor who exudes professionalism will get you the new windows you need in a flash and have you moved into the new home as quickly as possible. Your new windows will last about 20 years on average before needing a replacement. Still, as each year passes by, the current panes in your home slowly lose their ability to maintain the comfort level within your home and drive the cost of heating or cooling sky high as your air conditioner begins to work overtime to push out the desired air temperature throughout your home.

Getting the best rate on a home loan starts months ahead of a mortgage query, but once you’ve secured this funding, you can leverage it to create the perfect home for your family. Don’t forget to plan!