Frequently Asked Questions about Home Loans
Here are the answers to the most frequently asked questions about home loans.
What’s the first step to getting home loans?
The first thing you should do is shop around for the best rates and terms. Financial advisors usually recommend that potential buyers get a minimum of two or three different quotes. When you sign up here, you can get all of the quotes you need at once. We’ll give you as many as five quotes on home mortgage loans. You just have to complete the sign-up form, and you will get offers from lenders instantly.
How much home can I afford?
You shouldn’t buy a home that costs more than 2.5 times your annual salary. Another way to look at it is that your total housing expenses (monthly payments, taxes, insurance, etc.) should not exceed 25%-28% of your gross monthly income. It’s always better to err on the side of caution and buy a home that is well within your means in case you hit financial rough patches down the road.
What kinds of home loans are available?
There are three basic types of home loans:
- Adjustable-rate mortgages - interest rates and monthly payments fluctuate according to market conditions
- Fixed-rate mortgages - interest rates and payments remain the same for the life of the loan
- Hybrid mortgages - some combination of fixed-rate and adjustable-rate mortgages
Isn’t it cheaper to rent?
Actually, you might be surprised at how much home you can buy with what you’re paying in rent right now. Usually, the payments on home loans are roughly equivalent or just slightly more than the average rent payment. In addition, with rent payments, all of your money goes toward making your landlord a profit, and you don’t build equity, or ownership, in anything. When you buy a home, your payments get you closer to ownership, and you enjoy tax savings from your interest expense.
Do I have to use one of your lenders if I get quotes here?
No, you do not have to get your home loans from one of our lenders when you sign up for free quotes. You are free to just look around to compare offers. You can even save the information we give you and come back whenever you like.
To learn more about closing costs and what they entail, visit Closing Costs Demystified
