Choosing the right home loan for your budget and home requirements is key to paying your loan on time. Here are some home loan tips that will help you make a difficult decision a lot easier.
Start saving for a down payment – Your down payment will depend on your lender and the type of loan you choose. Most home loans will require a down payment that ranges from 2.25% – 20%. To start saving for your down payment look at putting away a percentage of your salary each month.
Check your credit score – A good credit score will help you get a better deal on your home loan. Consider applying for a credit report and look at ways to improve your credit score.
Get your financial documents in order – Most lenders will require a long list of financial documents to accelerate your loan application. At the minimum, you will need your last two pay slips, your recent W-2, last two years of tax returns, and current bank and brokerage statements.
Use a mortgage calculator – Mortgage calculators will help you understand how much you can afford. Consider different scenarios to look at the best options for you.
Compare offers – All loans are not the same, some will be more expensive but may include other benefits. Therefore, list out all the options before you finalize a lender. Start off by comparing the components of a standard mortgage with what you’ve been offered.