When preparing to buy a home, the first thing many homebuyers do is look at “homes for sale” ads in the newspapers, magazines and listings on the internet. Some potential buyers read “how to” articles like this one. But the next thing you should do before you call on an ad, before you talk to a Realtor is look at your savings. Get yourself a home loan calculator online and start to crunch some numbers. Why?
Simply because determining how much money you have available for down payment and closing costs affects almost every aspect of buying a home-including how you write your purchase offer and the home loan programs you qualify for. This is why a home loan calculator is an invaluable tool for finding out what you can and cannot afford.
Deciding Upon The Right Mortgage Programs Can Be Simple With Home Loan Calculators
Home loan calculators can help you decide if you only have enough available for a minimum down payment your choices of home loan programs will be limited to only a few types of mortgages. If someone is giving you a gift for all or part of the down payment, your options are also limited. If you have enough for a down payment, but need the lender or seller to cover all or part of your closing costs, this further limits your options.
If you borrow all or a portion of the down payment from your 401K or retirement plan, different loan programs have different rules on how you qualify. Of course, if you have enough for a large down payment, then you have lots of choices.
Several home loan choices include such varied programs as conventional fixed rate loans, adjustable rate mortgages, buy-downs, VA, FHA, graduated payment mortgages and all varieties of each.
Home Loan Calculator Can Help Before You Write Your Offer
A great reason to use a home loan calculator is that you need to have a clue about your down payment because it affects how you write your offer to purchase a home. You need to know how much of a mortgage payment you can afford with the type of home loan you are considering.
For instance if you are asking the seller to pay all or part of the closing costs, you have to be certain your loan program allows what you are asking. For example, for smaller down payments, lenders allow the seller to pay less closing costs than for larger down payments. Some home loan programs will allow a seller to pay certain type of costs, but not others. You need to be very clear when you write an offer.
Your down payment also affects your ability to qualify for a loan. When you make a small down payment, lenders are fairly strict about having you conform to their underwriting guidelines. For larger down payments, they will tend to make allowances or exceptions to the rules.
At this point you should be able to see the importance of using a home loan calculator when deciding upon a mortgage loan. There are so many aspects with getting the best loan for your situation. Your down payment is just one of the many aspects of the home mortgage loan process.
0 comments:
Post a Comment