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Things to Keep in Mind Before Getting a Home Loan

If you are looking to buy a home, you must do your research before making the decision. Doing so will help ensure that you get the best mortgage possible and save yourself time, stress, and money in the long run. When deciding what type of loan to take out for your new home purchase, there are many things to consider. This blog post will go over some of these considerations with you.

Keeping House Clean

Determine how much house you can afford 

One of the primary things that you need to keep in mind when getting a home loan is how much you will be able to afford and what type of monthly payment this entails. Some of the most seasoned loan officers operating in Redding suggest that you leverage online calculators for you to have a good idea of how much a house will cost you monthly. Fortunately, there are many calculators online that can help you determine the amount that you should spend on your new house each month, as well as other associated costs like insurance premiums. 

You also need to consider how long it will take for you to pay back the loan through monthly payments. For instance, if you take out a 30 year and 15-year mortgage at the same interest rate, it will take you much longer to pay off your house using the latter option as opposed to the former.

Know your credit score 

You should also exert the effort to know your credit score. Your credit history will often dictate the type of loan that you can get and what interest rate you should expect. For instance, if your credit is bad or non-existent, it might be difficult for you to receive a home loan with favorable terms from reputable lenders. Typically, subprime loans have higher rates than conventional home loans. You also need to consider that when you apply for a loan, your credit score will be determined by the lender and may not reflect what is on your report.

In case you have a low credit score, what you can do is to improve it over time. You can do so by regularly checking your credit report and making sure that all information is accurate and up to date. Also, you should avoid taking on debts that you cannot repay because this will negatively impact your score in the long run.

Make sure that you understand all of your options for repayment plans

There are many different types of loans that you can take out as well as repayment plans that accompany them. Some of these options include fixed-rate, adjustable-rate mortgages (ARM), installment loans, balloon loans, and more. It is important to understand how all of these work so that you do not end up getting a loan with terms that are difficult to manage or have extra fees tacked on.

  • Choose a mortgage type

When it comes to the most popular types of home loans, many people will tell you that fixed-rate mortgages are always better than adjustable-rate mortgages (ARM). While there is some truth behind this statement, both loans have their advantages and disadvantages. Fixed-rate mortgages typically come with lower interest rates but also have higher closing costs. On the other hand, adjustable-rate mortgages are more affordable but have the potential for your monthly payments to increase significantly in future years.

Make sure that you’re working with a reputable lender

It is also important that you work with an experienced loan officer or mortgage professional so that you can get everything done quickly and without error. With a reputable loan officer or broker, you can be sure that they will offer the best rates and terms for your home financing. You will have peace of mind that they have your best interest at heart and will not push you to take out a loan that is more than what your budget allows.

  • Compare rates from different lenders to find the best deal 

Another thing that you need to keep in mind when getting a home loan is that you should always compare the rates and terms from different lenders before making your final decision. Even though it can be time-consuming, shopping around for the best deal will ensure that you get the lowest interest rate possible and save yourself money in future years when you’re trying to pay off your house.

Get pre-qualified

Take the time to get pre-qualified for a loan before you start house hunting. This will help give you an idea of what type of home that you can afford and how much money it will take to purchase your new place. While not all lenders offer this service, there are companies out there that do so without charging any fees.

Consider the down payment required

It will also be a good idea for you to consider the down payment required for a home purchase with a mortgage versus an all-cash offer or other financing options. More often than not, a 20% down payment is required for a home purchase with a mortgage. If you were to make an all-cash offer or offer something else as your method of payment, that down payment percentage may be lower and it could save you thousands of dollars in the long run.

However, you need to keep in mind that the more money you put towards a home purchase with a mortgage may result in lower monthly payments but could end up costing you thousands of dollars over time due to the larger amount being paid back through interest. If your offer is all cash or using another form of financing, this percentage may be lower but your monthly payments could be higher. Make sure you do the math before making any decisions.


Whether you are buying a new construction home or looking for other financing options, it is important to understand how the terms of your loan will affect your finances. To make sure that purchasing a home is affordable and in line with what you want out of life, use the list above as an outline to help guide your decision-making process. Happy house hunting!


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