Checklist to Consider When Shopping for Home Loans

July 30, 2024

Shopping for home loans is extremely challenging! Most people only do this a few times in their life, and seemingly small differences can make a huge changes over time. Make sure you go in prepared with the right questions to ask your lender.

When you are shopping for financing for either a manufactured home, a real estate home or a condo there are going to be common questions you will encounter. Knowing what all your loan costs will be during your time in the home is extremely important.

 

  1.  When buying a home, start with as much down payment as possible.  You will qualify for the best rates, equity will build faster, and payments will be lower.

  2. Always consider taxes and insurance (called “escrow”) when budgeting your monthly loan payment.  When a lender quotes a payment for your new loan, ask if it includes taxes and insurance. This is often the most misunderstood element of a loan to new buyers – insist that the loan officer or sales person explain it until you understand.

  3. If you select a non-standard loan, make sure you understand terms like teaser rate, variable rate, or balloon payment. Proceed on specialty products like these with caution. 

  4. All banks require homeowner’s insurance and will have specific requirements on coverage. Visit with your agent to see if they can meet your needs at an affordable price. Do not be afraid to shop around.

  5. Look at how much interest you are paying in a dollar amount, not just as an interest rate. Shorter terms are much less overall interest. For example, a $100,000 loan at 10 percent interest is more than $215,000 paid over 30 years. That same $100,000 at 10 percent interest over 15 years is $93,500. Use this to your advantage – consider paying extra every month to pay less interest and pay the loan off sooner.

  6. Interest on home loans is often tax deductible. Consult your tax advisor for more information.

  7. Make your payments on time!  This sounds simple, but it will improve your credit score and give you more options when your situation changes.

  8. Know that your loan originator or salesperson is working for you. It’s their job to ensure that you are guided to the product that fits your needs.

  9. Best advice: work with a reputable retailer like Hames Homes. Contact Curtis or Clint today to talk about financing options. 

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