Many homeowners make the same mishap when looking for  Boise north end real estate. They do not compare different lending options. Getting the best loan is as important as finding the perfect home when looking to make a purchase. You are going to have to make this payment monthly for a long time. The interest rate and loan type are going to affect your future finances. Considering all options before deciding can help ensure you can stay in your new home. Here are some things to consider when shopping for different options.





There are different stages involved in any application. The first stage of mortgage lending is getting pre-qualified. You can get pre-qualified by calling different banks and answering questions about your debt and income. They will then send you a letter with an estimate on what you can afford to pay each month. This does not mean you have been approved for the loan. Pre-approval happens after you have put an offer on a home. You submit the application and the lender runs a credit check and investigates the home you have decided to purchase. If everything is as it should be, they will preapprove the loan; meaning that once all criteria aremet, they will finance the purchase and you can move toward finalizing your purchase.





It is important to think about the type of loans available when  shopping lenders. VA, FHA, Jumbo, and Conventional are some of the many types of loans. VA loans come from Veteran affairs and require extraordinarily little money upfront. If you are not a veteran, you do not qualify. FHA loans are given by the Federal Housing Administration and if you qualify,you are looking at paying about three and a half percent down. Typically, you have to pay for private mortgage insurance, however, due to the low down payment, so that if you default the lender receives their money. FHA loans are typically used for those buying their first home. Conventional loans are good for those who have savings built up and can afford to put the required twenty percent down upfront. Jumbo loans are used when financing more than the limits of a conventional loan. The amount is higher, meaning that there are special criteria that must be met, and credit requirements are stricter before approval can occur.



Paying it back


Another consideration is going to be paying the money back. There are different types of terms that you can choose from. Fixed-rate means that the interest rate remains the same the entire time you are repaying the loan. Adjustable rates are lower the first few years then adjust after and can significantly increase. This is a good option if you plan to change homes before the rate increase. Finally, you should also consider the different interest rates from different lenders, as this is going to impact your overall monthly cost.