Home shopping is a lot of fun. You get to go into different homes, take tours, and imagine your life in this new home. However, shopping for a mortgage is a very different animal. You need to weigh a lot of options before you decide “which mortgage loan is right for me in Austin”.
However, we can make it a little easier by giving you these six steps to picking out the right mortgage loan for you in Austin.
Look, you’re spending six figures on this house. There’s going to be some doubt whether you can afford payments on it. Using a mortgage calculator can help alleviate those concerns and show you how your household budget can work.
If your credit is decent, you may qualify for more than you are comfortable with spending per month. That’s great! You don’t have to spend to the limit of your pre-qualification, it just lets you know what market you are shopping in.
The prequalification lasts for up to six months, depending on your situation, so you aren’t going to have to run out and buy that day if you are not ready, but knowing the budget makes home shopping easier.
When you are getting ready to buy the house, we not only want to see that you have good credit, but we’d also like to know that you have some savings for a rainy day, as well as money for the down payment and closing costs.
While making a large down payment can be painful, it does put instant equity in your hands by putting you further on the path to paying off the house. It can also help you avoid paying PMI (Private Mortgage Insurance) if you can get over 20% on your down payment.
Loans are typically anywhere from 10 to 30 years. While we can really give you any reasonable length, that’s the general area. The rule of thumb is that the longer the mortgage term runs, the smaller your payments will be, but the more you will rack up in interest payments.
If you can afford the payments on a 15-year loan, you can save a bundle in interest payments over the life of your loan.
Here’s where you will get into the weeds a bit. There are a bunch of different mortgage programs, but here is a little bit of shorthand for you:
If you have are currently in or former military and qualify, the best bet is the VA Loan.
If you are going to live in a rural area or even some suburbs, always check to see if it qualifies for a USDA Loan.
If you have a lower credit score or do not have the funds for a large down payment, you should look at an FHA Loan.
If you are buying in bulk, meaning a large loan, get a Jumbo Loan.
If none of these fit you exactly, a Conventional Loan is probably your best bet.
You’re going to pay interest on your loan. It’s the price to pay for borrowing money. However, you don’t have to pay sky-high interest rates. Just a decade ago, mortgage interest percentage rates were in the 5’s and 6’s, and now they have hovered in the 3’s and 4’s, and occasionally the 2’s, for years.
Mortgage rates are constantly moving, and a good mortgage company will lock you in at the lowest rate available. In your loan, you can either lock it in for the life of your loan with a fixed-rate loan, or gamble with the whims of the market with an ARM (Adjustable Rate Mortgage).
It may be a bit higher at first to go with a fixed-rate loan, but this is a much safer option than riding the market for years. The ARM will reset every year after the initial term and can rise, fall, or stay the same.
If you are guaranteeing a move before your term is up, the ARM can be great, since you will pay a lower rate on your loan. If you are planning to stay, though, you can’t guarantee that rates will be lower or the same at the end of the term, and you may end up refinancing to a higher rate.
Just like shopping for a home, shopping for a mortgage loan in Austin can bear fruit if you are patient, and strike at the right time. Find a mortgage company that you are comfortable with, that offers great service and low rates, and you will be happy with the purchase.
Don’t just run to the lowest rate automatically. Better service can help you close on a loan faster and not miss out on your home, so choose wisely.
Call the best mortgage lender in Texas, Arien Bowersock’s Texas Loan Experts Team in Austin at (512) 669-8306 or visit BowersockTeam.com to apply now. Texas Loan Experts has the lowest rates on Conventional, FHA, Mortgage Refinances, Jumbo Loans, Debt Consolidation Loans, Rate and Term Refinances, Cash Out Refinances, and HARP Loans. We are also the exclusive home for Hero.Loan VA Mortgages and The Bank Statement Mortgage. We will come to you to close your loan. Nobody gets lower mortgage rates on better loans than Texas Loan Experts.
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