Applying for a home loan

When purchasing a home, applying for a loan is a very troublesome event for most people, but it doesn't have to be. I have a close business relationship with various lenders in the Waterville area, and they've helped me learn a few things that will make the loan application process uncomplicated.

1 – Create a list of questions regarding your loan program

If you do not fully comprehend the pros and cons of all the various loan programs, make sure to have a list of questions with you. I or one of my lender contacts can help you understand the advantages and disadvantages of each one, because it is a challenge to know the distinctions between fixed and adjustable rate mortgages.

2 – Determine when to lock

When you lock in a rate, it indicates that a lender holds to the interest rates for the loan – most often at the time the loan application is sent in. By floating the rate, you can lock the rate anytime between the day you apply for the loan and at the time of closing. Those who prefer to float conclude that interest rates will plunge in the near future. Click here to see the outlook for the next 90 days of interest rates.

3 – Determine if you want to pay additional points to lower your interest rate

When you elect to pay additional points to lower the interest rate of your loan, you will do so by paying for them in cash at the time of closing. Every point is 1 percent of the mortgage loan. To decide if you should purchase points, click here to use our points calculator.

4 – Gather your paperwork

Getting a mortgage loan requires lots of paperwork, so you should take some time to get all your documents together. Click here for a list of normal loan documentation.