When purchasing a home, applying for financing is troublesome for many people, but it doesn't have to be. I've got great connections to several lenders in Sioux Falls, and they've helped me realize a few things that will make the process of applying for a loan pretty simple.
1. Organize a list of questions about your loan program
If you do not perfectly realize the ins and outs of all the different loan programs, be sure to have a list of questions. It can be a challenge to understand the characteristics of fixed and adjustable rate mortgages. I or one of my lenders will be able to help you understand the advantages and disadvantages of the loans options available to you.
2. Determine when to lock
When you lock in the interest rate, it indicates that a mortgage lender keeps to the interest rates for the loan – typically at the time the loan application is sent in. By floating the rate, you can lock the rate anytime between the day you apply for your loan and the issuing of closing documents. Buyers who decide to float think that the interest rates will dip in the near future. Click here to see the outlook for the next 90 days of interest rates.
3. Decide if you want to pay additional points to lower your rate
Generally you can opt to pay additional points to lower the rate of your mortgage loan. Every point is 1 percent of the mortgage loan and is payable in cash at closing.
4. Bring your paperwork
Getting a loan requires lots of paperwork, so you should take some time to get your documentation together. Some commonly needed items include 2 years worth of tax returns and W-2s, 2 months worth of paystubs, your most recent bank statements, and occasionally even a letter from an employer stating that your job is likely to continue. When talking with your lender, he or she will let you know exactly what is required.