There are many types of loans available on the market today. How do you decide which is right for you? First, you need to have them explained to you in a way that you can understand. It is helpful to seek the help of a knowledgeable loan officer. With the many questions that arise during the loan process, you will feel comfortable knowing that someone is working to get the loan that is right for your current situation.
Steps to Qualify for a Loan
When meeting with your loan officer, you will be asked a lot of questions. It is important that you be prepared to fill out a loan application and provide information that is both personal and financial. This information will include your employment history, tax records, pay stubs, credit history, bank statements, current housing expenses, and any other assets you might have, such as a 401K plan or mutual funds. To get more detailed information regarding your employment a verification of employment form will be sent to your employer. Your banks will receive a verification of deposit form to show how well you handle your money. Your loan officer will use all this information to assess whether or not you are a good risk and how much money you will be able to borrow. It will also be helpful in determining the interest rate and loan type you will qualify for. Since written verification is needed to complete this process, it may take 3 to 4 weeks to finish.
Available Loan Types
Common loan types include fixed rate, adjustable rate, interest-only, and balloon. Your loan officer will also have information available regarding loans for special circumstances or specific ones available in Brooklyn Center, Minnesota.
● Fixed rate loans – These loans have the same interest rate for the duration of the loan. Your mortgage payment will never change. Typical loan durations are 15 or 30 years.
● Adjustable rate loans – These loans start out with a low interest rate, but this can change when they reach an adjustment period. Your interest rate will adjust to the current interest rate at that time. This could make your mortgage payment increase or decrease.
● Interest-only loans – These loans allow your mortgage payment to go towards the interest for the first 10 years. At that time, the principal is added in and your mortgage payments will rise.
● Balloon loans – These loans will have the same mortgage payment for the first 5 years. At that time, the loan is expected to be paid in full.
Options for Homeowners
If you are an existing homeowner in Brooklyn Center, Minnesota and are in need of some extra cash, then you might want to consider either a refinance loan or a home equity loan. You can use this extra cash to pay off unexpected medical expenses, credit card bills, education costs, or purchase a new car.
A refinance loan allows you to pay off your existing loan with a brand new loan. You will go through the same process of filling out a loan application and providing the necessary information as before. Obtaining a refinance loan is most advantageous to you if interest rates are lower than when you got your existing loan. You will be able to lower your mortgage payment. A refinance loan can also be helpful if you have an adjustable rate loan and interest rates are rising. You can switch to a fixed rate loan with a set interest rate to keep your mortgage payments the same every month. Again, there are many types of loans on the market today, so getting in touch with a loan officer will be helpful.
Another option is a home equity loan, especially if you have lived in your home for a number of years. The equity earned in your home is the difference between the value of your home and the amount you still owe. You are able to receive this loan as either a line of credit or a lump sum payment. Home equity loans usually have terms of 10 to 15 years.
Whatever your needs are in Brooklyn Center, Minnesota, one of our knowledgeable loan officers will be able to help you with a mortgage, refinance, or home equity loan. Contact our office today.
