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Financing Your Morris Plains Home... What Type of Loan Structure is Best for YOU?


When buying a home, financing is always the first factor in pre-qualifying you to buy your home!

If any step in buying a home is confusing, complex, or tedious, it's figuring out how to get the right kind of financing. However, since the Internet has made it relatively easy to learn about, shop for, and secure great mortgages and companies, the frustration factor of getting financing has been mercifully reduced. If you decide to work with a referral from someone, that also eases the process and if they came recommended,  you know that 'your friend' had a good experience and was taken care of too.

Take these first steps to learn how home financing works:
 

Check your credit history
Get prequalified
Shop for loans
Get preapproval letter in advance so when you make that offer it is strong


What Type of Loan Structure Works Best For You?

There are many different types of loans available. However, one of the basic decisions you'll have to make is whether you prefer the predictability of a conventional loan, knowing that your payment will be the same amount each month over the life of the loan, or whether you are comfortable with foregoing the fixed monthly payment for an adjustable loan where the initial interest rate is lower and the monthly payment amount will fluctuate periodically throughout the life of the loan ~ such adjustables are fixed for usually 5yrs. 

Both the conventional and adjustable loans provide a variety of terms to select from that will best meet all your needs. A mortgage broker will be able to provide you with a wealth of information on the various options available as well as determine whether you qualify for any government-backed loan programs.


How much house can you afford? The rule of thumb is that you can buy  a house that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

MSMoney.com has some great tips and guidance here:

Determining how much home you can afford means figuring out what size mortgage a lender will qualify you for.

To calculate this number, lenders use:
Your income
Your credit rating
The size of the down payment
The length of loan (15 years vs. 30 years)
The amount of your outstanding debts
The interest rate for your mortgage
The likelihood that you won't be able to pay back your loan

Using their Home Affordability Tool, you can estimate what size mortgage you'll qualify for, and what the monthly payments will be depending on the size of your down payment. By getting these estimates, you'll be confident entering realistic figures when you go to get prequalified or preapproved for a loan.  {Read MORE}

With rates still at an ultimate low... 4% (30yr fixed) the guidelines might be a tad more strict but anything under 5% with house prices as low as they are... is the best time to buy and get the financing you can afford.

For more guidance and home buying needs, do not hesitate to contact LouAnn and we've made it easy in one step to fill out all you need HERE {just click}

Happy Home-Buying, LouAnn will make it a fun & memorable process!

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