One of the biggest decisions you will make in your lifetime is to purchase a home for you and your family. With the cost of a home, it will probably be necessary for you to qualify for a loan to pay for it.
Steps to Qualify for a Loan
With the help of an experienced loan officer who can guide you through the loan process, you will be preparing to move into your new home in no time.
You will need to be prepared to disclose a lot of personal and financial information when applying for a loan.
● Employment Information – A verification of employment form will be sent to you employer. You will also need to provide your pay stubs.
● Financial History – A verification of deposit will be sent to the banks you have accounts with to show how well you manage your money. You will also need to provide your tax records, credit history, current housing costs, and information regarding any other assets you might have.
You may be requested to provide additional information that will help in the processing of the loan. All of the information you provide will be used to help determine what kind of loan you can afford, the interest rate you get, the size of your payments, and the term of the loan. Your loan officer will keep this information secure and use this information to help you qualify for the loan that meets your needs.
Loan Types Available
Common loan types include fixed rate, adjustable rate, balloon, and interest-only. Your loan officer will assess your current circumstances and help you determine which type of loan will work best for you,
Fixed rate loans give you the same mortgage payments every month for the duration of the loan because the interest rate never changes. Typical loan durations are 15 or 30 years.
Adjustable rate loans start out with a low interest rate, but this can change when the loan reaches an adjustment period. At this time, the interest rate will change to the current interest rate. Your mortgage payment can go up or down at this time.
Balloon loans have low interest rates, but the loan is only for 5 years. The loan needs to be paid in full at that time. This can be accomplished by the sale of the home, by refinancing the loan, or with a lump sum payment.
Interest-only loans have mortgage payments that go only towards the interest for the first 10 years. At that time, your mortgage payment will go up because the principal is added in. This loan type works well if you are expecting your income to increase in the future.
These and other mortgage types available in Northampton, Massachusetts will be explained to you by your loan officer to help you with your decision.
What Options Do Existing Homeowners Have?
If you own a home in Northampton, Massachusetts, then you have two choices to help you with your financial needs – a refinance loan or a home equity loan.
A refinance loan can help free up cash that you can use for other expenses, such as credit card bills, medical expenses, or education costs. You will go through the same loan process as you did when you applied for your existing loan. By replacing your mortgage, you can change your interest rate, term, and mortgage type. Even if you have refinanced in the past, obtaining a refinance loan remains an option,
Home equity loans allow you to borrow money from the equity you have earned on your home. Equity is the difference between your home’s value and the amount you still owe on the loan. You have the choice of either receiving this loan as a lump sum payment or a line of credit. Home equity loans usually have a shorter term of 10 to 15 years. This cash is available to help you buy a new car, remodel your home, or start up a new business.
Contact one of our experienced loan officers today to find out about mortgage, refinance, or home equity loans in Northampton, Massachusetts.
