Internet has changed our lives for the better. Whether it's how to pay bills or where to buy a good coffee maker. Now that the internet is so easy to use, we can use it to find and apply for a home mortgage, which is a big financial decision. There are a lot of online lenders that offer mortgages, so you may be wondering how to choose a good one. The process is not as hard as you might think. You can look at different loan options from the comfort of your own home. Six or seven years ago, there weren't nearly as many loan options that were flexible and easy to get. Most, if not all, of them can be found online.
Behind the scenes, everything is the same: the lender checks your credit history and your ability to pay back the loan, and then decides whether or not to give you the money. The first thing you can do is contact Equifax, TransUnion, and Experion to find out your credit score. Then, compare the different companies that offer home loans to find out what your interest rate would be. One important thing to remember is that you shouldn't just let everyone check your credit score. Each time a financial company checks your credit, your score goes down a little, which can cost you a lot if a dozen lenders ask for your credit information.
The first thing you compare is the Annual Percentage Rate (APR). Ask for quotes from companies that can give you the information without checking your credit score. Even if the prepayment penalty doesn't seem like much, it can cost you a lot if your finances change and you can pay off the loan in full before the term is up or if you pay it off with a refinance option. Drop the companies that make you pay fees for paying early.
If you choose a fixed rate mortgage, you won't have to worry about how the market changes. If you have a variable or floating rate, your monthly payments could go up to a point where you can't afford them. Balloon mortgages have short terms of five to seven years and have low monthly payments, like a 30-year mortgage. At the end of five or seven years, though, you have to pay off the entire balance, either by refinancing or selling your home.
All rights reserved. Copyright (c) 2006 Joel Teo.
