The Loan Process
Financing your home purchase
Unless you are one of the
rare few able to pay cash to
purchase a home, you will need
to find the right lender and the
right mortgage product.
There are many different kinds
of lending institutions that offer a
wide range of loans and special
programs. You should diligently
research your options and shop
around for a mortgage with as
Here are the main steps to securing a mortgage that’s right for you
1. Educate yourself about
your options.
There are myriad loan types and programs
available through thousands of banks,
finance companies, credit unions, and
other assorted lenders. Not surprisingly,
there are just as many sources of information about mortgages. Websites like
Realtor.com, as well as books, news articles, seminars, mortgage brokers, lenders,
and knowledgeable real estate professionals all can be of help. Make use of them
and get more than one opinion.
much care as you would take
when searching for a home.
2. Be realistic about your financial
situation.
Ask yourself how much mortgage and
down payment you can really afford. What
do you have to give up, not just every
month, but maybe for years and years by
increasing your debt? Be sure to carefully
weigh the risks and opportunities.
Along these lines, Realtor.com provides
you with a variety of loan calculators
that will help you determine your regular
monthly payment based on your projected
down payment, the loan principal, the interest rate, the mortgage term, and so on.
Additionally, be sure to factor in all related
taxes, insurance, improvements, homeowner fees and all other potential costs
into the equation.
Note: some lenders will qualify you for the
maximum they are willing to lend which
may be more than you can truly afford, given all your other responsibilities.
• Make a list of your monthly expenses
• Project your other financial
commitments during the life of the
mortgage
When shopping for a loan you should consider two main sources: direct lenders and
mortgage brokers.
Direct lenders have the money available
and make the decisions, but they have a
limited number of in-house products to
offer.
Brokers are intermediaries who charge the
lender a fee, who can provide you with
loan options from many sources, and can
often save you money overall. Either way,
consult your real estate professional for
advice and perhaps some beneficial connections.
HOME BUYER’S GUIDE
www.HoulihanOmalley.com
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