The process of finding and getting approved for a new home loan can be a stressful situation, but in many cases you can make it much easier on yourself by knowing a little bit more about what kinds of loans are out there. That makes the home loan process easier and more efficient, and you can feel confident that you are getting the best possible loans for your financial situation. Here are three features you want to explore in a potential new loan.
1. Good Loan Terms
There are a lot of different ways that a home loan can be structured, from fixed rates for the life of the loan to adjustable rates with caps and other features. Without some information about the different loans available, you might end up with something that doesn’t offer you the lowest price, or that is overly complicated and changes over time. Make sure that you talk to your home loan company about what they are offering so you can get the best terms for you.
2. No Prepayment Penalties
The percentage of your loan that you pay toward interest is higher in the beginning and gets lower over time as you pay down the principal balance. If you would like to pay off the loan early, or you want to make extra payments toward principal (which can reduce the total interest that you pay on the loan and can shorten the time that you have the loan out), you want to make sure that you won’t be penalized for these extra payments. In most loans they will tell you if there is a prepayment penalty, and generally you want to avoid loans that have this fee.
3. Great Rates
Another important factor in any home loan is the ability to get the best possible interest rate. Even a seemingly minor difference of 0.25% on the interest rate can add up to tens of thousands of dollars over the life of a 30-year loan. The best way to get a great rate is to shop around with several different lending institutions before you settle on a single one. If you’re not sure what the interest rates will be for your credit, feel free to go in and get pre-approved by different institutions—it generally won’t hurt your credit if you go and get a few different approvals within a short time frame (a couple of weeks), as credit rating agencies recognize that you are shopping around for a loan.
When it comes to easy home loans, Wasatch Peaks is a great place to start. Come talk to our friendly loan officers today or call us at 801.627.8700 to learn more about how you can get the best rates and great service from our credit union.
