City Hall Los Angeles

Follow A Few Simple Steps To Make Shopping For Your New Home Loan A Little Easier

It is likely to be one of the largest purchases of your life, and it can be extremely nerve racking and overwhelming. Buying a new home! Whether you are buying your first home, or moving to a new home; purchasing a home and shopping for home loans is a major decision that requires a lot of time and energy.

Where Do I Start?

If you are shopping for a new home and a home loan for the very first time then you may become very overwhelmed very quickly if you do not take it slowly. The first thing that you should do is start researching your options. Collect all of the financial information that you have and approach your bank.

A good place to start is with the financial institution that you do most of your banking with. You have likely built up a reputation and perhaps a relationship with your bank and that will help when you are trying to get a loan. You will have to gather together all of your financial information including:

* Pay stubs
* Proof of other income sources
* Car payment records
* Other debt information
* Savings and investment information

Your financial institution should be able to determine from the information that you bring in what type of a mortgage you qualify for. The bank or financial institution will also pull a credit report for you to see how your credit looks.

Should I Only Visit One Bank?

No, definitely do not stop shopping for a mortgage after visiting only one financial institution. It is definitely a good idea to shop around for the best mortgage rate. Different institutions may offer you different payment options and lower interest rates. If you have poor credit, then you may want to talk to a mortgage broker who will likely be able to offer you some options that you can afford.

Get Pre-Approved From Your Bank

Before you even go out house hunting it is a good idea to get a pre-approval from your bank or financial institution. This process will take a little bit longer, but it will pay off in the end because you will know exactly what price range to look at when you are house shopping.

Another benefit to being pre-approved is that when you find a home that you are interested in, if the seller is in a hurry to sell, they will often go with a buyer who has been pre-approved because it is a sure thing.

What About The Interest Rate?

It can be overwhelming when you go to get your home loan; there are so many decisions that have to be made. Do you want a variable interest rate or a fixed interest rate? How do you decide?

Your decision will likely depend on a number of factors in the market place, most importantly, what the interest rate is at the time that you get your home loan. In the past few years, the market has seen a sharp decrease in interest rates. In fact, some of the lowest rates in history have been experienced in the last few years.

If the interest rate is quite low relative to the last few months when you apply for your home loan, than you may want to consider locking into a fixed rate mortgage. That way, even if the interest rate climbs in the future, you will be guaranteed the same low rate that you signed on.

However, if you think that the interest rates are still likely to fall then you may want to sign in on a variable interest rate home loan. That way if the interest rate falls, you can still take advantage of the new lower rate. You will want to check with your lending institution on the variable rate home loans that they offer, as they do differ greatly.

What Term Length Should I Choose?

Another big decision when you apply for and sign onto a home loan is the term of the loan. This is a very important decision because the length of the loan will determine how much interest you will pay over the term of the loan. There are a few ways to look at this problem. If you require low monthly payments than you may want to choose a longer term loan, such as a 25 year or a 30 year term instead of a 15 year term. If you extend the term of your loan, then your monthly payments will be lower, however in the long term you will be paying more interest.

If you are in a situation where you are able to handle slightly larger monthly payments, then you will be paying off the principal of your home loan much faster, and not paying as much interest.

Are There Other Ways Of Paying My Loan Off Faster?

Most types of loans will allow you to make balloon payments at least once a year. A balloon payment is where you can pay directly on the principal of the loan, so you are not paying any interest. This is an excellent way to reduce the principal of your loan. And if you are able to make balloon payments, they are worth it.

So Now What?

When you are ready to start shopping for a home loan, whether it is your first or your second, remember to do your research. A good place to start is with a mortgage calculator. You can find a mortgage calculator on the internet. This is an excellent tool to help you make some of the tougher decisions about your mortgage. But there is no replacement for discussing your individual case with a financial institution. Just remember to shop around before you decide which home loan is right for you.

© 2005 http://www.home-loans-101.com

About the Author
Kevin Brown is successful author and publisher of many informative websites including http://www.home-loans-101.com. His websites offer tips and advice on a wide array of topics including home mortgage loans, mortgage refinance, home equity lines of credit, and more.

MORE ARTICLES:

Men Still Obsessed With Size, At Least When it Comes to Television Shopping
Whether it is watching news, sports and films or simply playing computer games, Brits love televisions. As a nation, we spend nearly a third of our personal time in front of one. And according to new research released today, only quality time with loved ones is more important (43% of those questioned) -- making the TV an integral part of British life.

Ruby James Teams up with Kobe Bryant from LA Lakers for Charity and Celebrates CD Release of Desert Rose with Sold Out Show in Los Angeles
Talented country rock blues artist Ruby James teamed up with Kobe Bryant from the LA Lakers who autographed game worn shoes for her , this was all for a good cause as it raised money for St. Jude Children's Research Hospital®. Ms James also donated a portion of her CD sales of "Desert Rose" produced by John Avila of Oingo Bongo". She played to a packed house on April 21st in Los Angeles at the Troubadour with a dynamic live performance that left her audience blown away by her memorizing voice.

Wholesale Shopping For Musical Instruments
Music and musical instruments are instrumental for anyone to get stimulated and refreshed leading to a contempt feeling. Acquiring relaxation is primarily focused and this is achieved by playing musical instruments like guitar, saxophone, violin, etc. Learning music is done as a hobby, interest and as a leisure activity. Acquiring lessons is easily possible as there are various openings to learn and master. There are recognized institutions to impart the best and perfect styles of using musical instruments. Schools also provide opportunities to learn playing musical instruments.

Debt Advice from Consolidated Credit Counseling Services... Nonprofit Advises -- Know Your Shopping Style and Avoid Holiday Debt
December debt is a bad way to end the year and we know our stress will be worse in January when we must face the stack of bills that we can't pay off. Get advice customized for your shopping syle and save money this holiday season.

Bargain Depot Discount Furniture Announces Furniture Shopping Spree Sweepstakes
Registered users on the Bargain Depot Discount Furniture website will get the chance to win a furniture sweepstakes

Entertainment Production Company Fuzion Entertainment Launches Anticipated Website Indiefuze.com
Fuzion Entertainment launches its anticipated website Indiefuze.com. Indiefuze is billed as an Online Production Network that offers exclusive entertainment from artists, musicians, poets , comedians and more. The site includes online only shows such as 24 Hours of Poetri which was developed for Tony Award winning Def Poet POETRI.

HUGE Opens New Los Angeles Office
HUGE, a leading independent interactive agency that creates and builds online businesses, announced today the opening of its Los Angeles office.

Las Vegas Entertainment and Business Meetings
When arriving in one of the most exciting cities on the planet, Las Vegas, Nevada, I could not help but think about how interesting my Company's meetings would be. I knew it was a time for serious decisions and keeping a focused mind, the meetings were a great success and it was now time to relax and enjoy my environment of bright lights and all night Las Vegas entertainment.

Buried Child, The Winner of the 1979 Pulitzer Prize for Drama, by Sam Shepard Will Be Presented by Quad Boro Entertainment at Roy Arias Theatres.
Quad Boro Entertainment presents Buried Child, the winner of the 1979 Pulitzer Prize for Drama, written by Sam Shepard. This production will be directed by Heather Arnson. Performances will be at Roy Arias Theatres from November 7 thru November 18, 2007

Mystery Shopping Career
Although Mystery Shopping can seem like a fun career to be in, its equally important to meet deadlines of your Mystery Shopping assignments, as it might be for other professions. One surely would not appreciate a less pay for putting the same effort as other Mystery Shoppers, because the Secret Shopping report wasn't submitted in the designated time.

Musictoday and UltraStar Entertainment Announce Online Partnership with Little Big Town
LittleBigTown.com to become official fan club site with unprecedented access for fans.

Shopping For Patio Furniture, Consider Wrought Iron
If you're looking at patio furniture, you have a wealth of choices. Today, you can buy wicker, metal, wood and plastic furniture in a wealth of styles to match your every d?cor. One of the most popular styles, though, remains to be wrought iron. Before you make your final purchase, you may want to take into account what wrought iron pieces can offer for your home.

Marriott Village Lake Buena Vista Offers Shopping Package with Accommodations and Super Savings
Take one last summer trip to Orlando and shop the Orlando Premium Outlets® with a package that combines great hotel room rates and a shopping spree at a great value.

Why Is Shopping So Satisfying?
Shopping is something that everyone has to do, for some reason or other You have to go shopping for clothes, food, household items, and other things to accommodate your day-to-day activities