Tips for buying or refinancing your home
(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.