Choosing a lender
Most people don’t have the cash in hand to purchase a home so taking out a loan is your next best choice. Your first step in the process would be to select a lender. There a are few options available in selecting a lender.
- One option is if you belong to a credit union you can go through them
- Banks usually have a Mortgage Department that can assist you
- There are also many privately owned companies that can work with you on a loan
Once you select your lender the next step will be to answer their questions. The questions they ask will involve your financial situation. Your answers will determine what type of loan you can qualify for or even if you qualify for a loan. Your lender will let you know what documentation you need.
What types of loans are available
A loan is a loan – well not really… There are several types of loans available. Your lender can tell you which one best fits your needs. Some of the most common loan types are:
- Conventional Loan
- VA Loan
- FHA Loan
Pre-Approval vs Pre-Qualification – Once all the paperwork has been submitted to the lender, the lender will give you an estimate on how much loan you can afford. You will get either a Pre-approval letter or a Pre-qualification letter. The biggest difference between the two is that getting pre-qualified is typically a faster and less detailed process, while pre-approvals are more comprehensive and detailed. Either type will give you an estimate of your how much loan the financial institution believes you can afford – but keep in mind, only you really know your financial situation, it’s up to you to determine what payments works best for you.
