A home loan, otherwise known as a mortgage, can seem rather complex to a first-time homebuyer. There are many important details to understand about home loans so that you could receive the best deal possible and not hurt yourself in long run. Making an uninformed decision about a home loan could cost you far more money than anticipated, leaving you in a bad financial state of being. Luckily Max Cash® Title Loans is here to give you some handy tips on navigating the ins and outs of home loans.
Advice for First-Time Homebuyers
Do your homework and research as much as you possibly can. The more informed you are about home loans, the better chance you will have of securing a good deal with a low interest rate and a manageable monthly payment for a house. Wandering blindly through the dense woods that is the process of obtaining a home loan will end up putting you in a position you do not want to be in.
Learn what you can by talking to someone like a mortgage banker and make your moves accordingly. Let them know what you are trying to do and what the best home purchasing situation for you would be. A good mortgage banker will customize your home loan to your specific situation and explain all the costs ahead of time.
How to Prepare Yourself When Applying for a Home Loan
No two home loan acquisitions are the same. Even though there is no template for what to do when applying for a home loan, there are still a few things to consider no matter what your situation is.
Make sure you get in touch with a mortgage banker that you find trustworthy. If you do not know one however, you should have your real estate agent suggest one.
Before getting the ball rolling with acquiring a home title loan, you will want to:
- Use as much cash as you can for your down payment. Save or acquire as much money as you can for a down payment as well as the closing costs.
- Formulate a budget for any expenses you will have further down the line, as if you already were in possession of the house, and make sure you aren’t financially stretched. Your mortgage should exceed 30% of the money you take home after taxes every month.
- Have a strong idea of the price range you are able to work with. Do your research on potential homes that may work for you either through your local realtor or online through a real estate website like Trulia.com. Compare what you find by getting a look at the real estate taxes, the statistics of the neighborhood, along with any other criteria you may think of. Most importantly of all, do not rush this. This is one of the most important decisions you will ever make.
Why Get Preapproved or Prequalified for a Mortgage?
This gives homebuyers a much-needed edge when it comes to competing offers for a home. When a seller notices that one buyer already has approval from the bank while the other one does not, they are most likely going to choose the buyer who has the bank’s approval.
What Kinds of Interest Rates Can a First-Time Homebuyer with a Bad or Good Credit Score?
When you receive a conventional loan through Fannie May or Freddie Mac, there is a noticeable difference in terms between a poor credit score and a good one. Your interest rate could range from 0.75% for a strong credit score to 1.25% for a weaker one. On a VA or FHA loan, the price difference could be up to as much as 0.125 to 0.250% in terms of an interest rate.
Tips for Repaying Your Mortgage
There are two good ways to pay down your mortgage at a quicker pace, including:
- Refinance at a lower rate.
- Pay more toward the mortgage.
By refinancing for a lower interest rate, you could lessen the amount of interest that stacks up when you make a mortgage payment each month. You could also lessen the amount of interest you pay by paying more than the minimum payment because that extra money gets taken off the principal, which in turn lowers that amount of interest you pay.
Points
One thing you need to be aware of are points. For those who do not know, points are fees that the borrower will pay their lender at the time that the loan is closed, which is shown as a percentage of the loan. For example, on a $200,000 loan, 2 points means that a payment of $4,000 will be due to the lender.
Points are a part of the cost of credit for the borrower. They are part of the investment return for the lender. Points are not always necessary when it comes to obtaining a home loan, however a ‘no point’ loan might have a higher interest rate than you would want to pay for.
Discount points refers to a fee, usually expressed as a percentage of the loan amount, paid by the buyer or seller to lower the buyer’s interest rate.
Additional Costs of Ownership to Be Aware Of
In addition to taxes, homeowners’ association fees, and principal and interest fees, there are other costs associated with being a home owner. These costs include:
- Private mortgage insurance for a conventional loan or monthly mortgage insurance for an FHA loan.
- Monthly mortgage insurance for an FHA loan.
- Costs of repairs and maintenance of the home.
The Necessary Documentation Needed to Make Things Go Quickly and Efficiently
No two home purchases are the same, but to make the home loan acquisition process go quickly and smoothly, you should make sure that you have the following personal and financial documents for your mortgage banker on hand:
- Past two years of tax returns
- Past two years of W-2s or 1099s
- Past two months of bank statements
- Past 30 days of pay stubs
- Copy of your driver’s license
- Copy of your passport or Social Security card
Is Homeowners Insurance Necessary or Optional?
If a lender is involved in the purchase of a home, then homeowner’s insurance will be a necessity. That said, it is a good idea to have homeowner’s insurance to cover emergencies. Disasters like high winds, hail storms, flooding, as well as any other unforeseen accidents could happen and leave you up creek without a paddle if you do not have funds to cover the cost of damage. It is best to have all of your bases covered in case the worst happens.
How Max Cash Title Loans Could Help
When it comes to paying down your home loan, sometimes you can run into a financial pickle. It could be that you received a costly hospital bill, you had to repair your vehicle, or any number of other calamities that take a huge bite out of your pocket book.
With a car title loan through Max Cash, you could save yourself from getting into serious trouble with the bank. You could avoid some serious damage to your credit score if you find yourself struggling. Depending on the current value of your vehicle and your ability to repay the loan, you could receive a car title loan worth up to $50,000 through Max Cash.1 2 5
Depending on how much money you still owe on your mortgage, we may even be able to help you pay off the rest of it altogether.
There are some useful advantages customers receive when working with Max Cash Title Loans for your car title loan acquisition needs, such as:
- We are open 7 days per week
- Having a bad credit score may not be a hindrance5
- Having declared bankruptcy in the past may not disqualify you5
- There are no penalties whatsoever for pre-payment3
- Pre-approval is quick and easy5
- It is possible to receive the borrowed funds the very same day5
If you have any questions about car title loans or you simply need to get a hold of us, you can reach Max Cash Title Loans by:
- Calling or texting us directly at 1-855-561-5626
- Emailing us at info@maxcashtitleloans.com
- Writing to us at 1270 E. Broadway Rd. Suite 208, Tempe, Arizona 85282