Applying For Home Mortgage Loans: What You Need To Know

When you are looking to get any kind of home mortgage loans you'll need to be able

to explain what you need that loan for when you are talking to a mortgage banker. This sounds like it is such a no-brainer, however, you would be surprised to find out what some people tell the banker when applying for that loan. Bankers are not stupid, so you need carefully prepare for the meeting and know the honest answers to any questions you are likely to be asked.

The first you need to do is clearly identify what the proceeds of that loan are for.

Is it to purchase a house? That is usually what home mortgage loans are for. (We have to start somewhere!) How much can you tell them about the house? Do you already know what the house is worth? Do you know what the sellers are asking for the property? Have you already made an offer? Do you know what you are going to do with the house? (a residence or rental?) What amount of monthly payment can you pay for the loan? Do you have the listing of all of your income and expenses handy? Has there been an appraisal done on the house?

Is the loan to refinance your own home? Are you looking to get any additional money out of the loan? What is the purpose for that extra money? Home mortgage loans are an easy way to get extra money for all kinds of things such as: remodeling your home, it can take care of many other different financial dealings such as kids going to college, medical bills that just can't wait, etc. Tell the banker, or lender, what the extra money is for. (They might be able to offer a different product that are more suited to your needs!)

The type of home loans that are available will have many different prices ranges, or interest rates, depending on what the money is actually going to be used for. That is why it is always a good policy to be honest with the lender. They will have found out, anyway, so start off with a good reputation, and go from there. The last decade or so has been a good time for interest rates. The rates, at the time of this writing are hovering around the 3 - 5 % mark. That can be a very good rate depending on your credit.

Speaking of which, how is your credit? Home mortgage loans are those long-term loans that are a very tricky business when you are talking about the very small differences in interest rates over the long haul. Just a small swing, say from 3.5% to 4%, could mean thousands of dollars over the life of the loan, which could run for 20 - 30 years. Is your credit good enough to go anywhere or is it that kind of credit that is a bit on the slim side?

If you can go anywhere, make sure that you do go everywhere in your search for your loan. The worst thing in the world you could do is to accept the first offer that is made and not check out the place down the street. You could go online and look for reviews for home mortgage loans and read about some of the best ones, online or off.

by: Mike S Williams

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