Tips for buy­ing or re­fi­nanc­ing your home

The Palm Beach Post - Residences - - Front Page -

(StatePoint) If you’re think­ing about buy­ing or home im­prove­ments, how do you find the right loan prod­ucts or lender?

• Re­search prod­ucts and terms. Home loans come in two forms: fixed rate or ad­justable rate. Fixed rate loans come with terms vary­ing from 10 to 30 years for con­sumers who want the se­cu­rity of con­sis­tent monthly pay­ments plus a rate that won’t change over the life of the loan. Ad­justable rate mort­gages (ARMs) typ­i­cally are of­fered at a lower rate with an ini­tial term of five to 10 years.

• Choose a lender fo­cused on your needs. In a crowded mort­gage land­scape, it’s im­por­tant to find loan ex­perts to help you through the process. For ex­am­ple, the Ally Home Team is on hand to help home buy­ers through the home loan ex­pe­ri­ence, from ap­pli­ca­tion to close, en­sur­ing they reg­u­larly an­swer ques­tions bor­row­ers may have along the way.

• Ask your lender what prod­ucts fit your needs. For ex­am­ple, Fan­nie Mae’s HomeReady product may be a good option for first­time home­buy­ers and mil­len­ni­als. Key ben­e­fits in­clude down pay­ments as low as 3 per­cent, plus these loans are priced sim­i­larly to stan­dard loan pric­ing, and flex­i­ble sources of funds can be used for the down pay­ment and clos­ing costs.

• Es­tab­lish your lim­its. Some lenders pro­vide use­ful tools to get you started, such as Ally Home, a new di­rectto-consumer home loan ser­vice of­fered by Ally Bank, (www.ally.com). Its Af­ford­abil­ity Cal­cu­la­tor helps you an­a­lyze your house­hold in­come and cur­rent fi­nan­cial obli­ga­tions to es­ti­mate how much house you can af­ford.

• Re­fi­nance an ex­ist­ing loan. Re­fi­nanc­ing is a po­ten­tial option if it of­fers a bet­ter rate than your ex­ist­ing loan, al­lows you to lower your mort­gage pay­ment, or short­ens the term of your ex­ist­ing loan. If you have con­sid­er­able eq­uity, it’s also a way to con­sol­i­date debt or fund home im­prove­ments if used wisely.

For most peo­ple, buy­ing a home is the big­gest pur­chase of their life. Once you find your per­fect house, make sure you make the right fi­nanc­ing choices to com­plete the pic­ture.

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