Once you have decided to purchase a home you should go to get pre-approval on the loan amount that you will qualify for as well as what down payment you will have to put down and/or what points will be paid toward the loan at closing. While all of this may sound like a foreign language you will find all the answers and explanations with a home loan officer.
When you find yourself looking into different banking and lending options you will notice there are many different ways to go when you are financing a home. Is this your first home? Are you a veteran in one of the branches of service? Do you want a ten year, thirty year or other type of home mortgage. Do you want to put down ten percent or fifteen percent? Can you afford monthly payments in a specific range or do you need to have a fixed rate mortgage as opposed to a balloon payment at the end which is similar to a lease of a vehicle.
All of these questions can be answered by a home loan officer. It is a simple process to find a good one through the use of internet web sites. Once you find a bank that is willing to lend you money for a mortgage they will assign you a loan officer. It is the job of the officer to figure out what avenues work best for your financial situation both now and in the future to the best of the bank officers ability.
You will work closely with this person in determining what you can afford, how you will make the down payment and what type of loan is the best for you. These officers are skilled in helping young couples determine what price range they can afford and giving options on how to find the best value in the best neighborhoods for the money they are willing to lend the potential home buyer.
It is in the buyer's best interest to work closely with and take the advice offered by the home loan officer to avoid trouble when going into the contract phase and putting up the earnest money that is required by the real estate agency to say the house is 'sold'. If the home buyer has any issues then the earnest money will probably be lost to them as they break the contract because the financing is not working out.
Many young couples try to purchase a home that is more expensive than what they can afford. The lender is only willing to give a specific percentage for the buyers based on income and debt. The ratio of debt to income must not exceed a certain amount or the loan request will be kicked back for a higher down payment. There are many options to consider so take the advice offered and follow it to keep from having unnecessary issues right before the closing of the sale. Happy House hunting.