When shopping for a new home, visions of gorgeous kitchens, sumptuous master baths and closet space may do a rain dance in your head, but the most important step called financing your new home cannot be swept aside.
As you shop for your dream home the key questions you can ask yourself are what the financial alternatives you have if you fall short in payments or don’t have that kind of money to go for an outright purchase, do you give up the idea or find other options?
You answer a few simple questions-
What information will I need to gather to apply to finance my new home?
What can I afford in the way of a mortgage?
What are my loan options?
In many respects getting a loan or arranging for alternative source to financing a new home is easier. Your builder may offer attractive finance packages, either directly through own mortgage subsidiaries or via an affiliate. Builders are offering different schemes that make it easy for the home buyer. Study the market properly; see what suits you and what are the benefits you will get and the discounts you can avail off.
In addition to builders financing, there are some unique tools that apply to new homes that include bridge loans and new construction financing. These can be used to fund the purchase and construction of your new home before the sale of the existing one.
Getting ready- Someone once said that success happens when preparation meets opportunity. Whatever lender or type of financing you select, it is better to be prepared before you put in your application. Studying your credit score and taking care of it is the first vital step for good financing alternatives. Get your act ready by having your documentation complete, lie your ITR, salary receipts etc.
Determine how much you can afford- You can get a good idea of this in advance by checking the calculators most lenders and builders provide. The bottom line is get accustomed to experimenting with different rates, down payment amounts, loan terms to see how that effects the top price you can afford for your home.
The many shades of loans- Loans come in different shapes and sizes. Think of them in terms of their problem solving characteristics. Go for conventional loans if you can make a down payment of about 20%, then banks or financial institutes can give you a loan, provided you come up to their expectations. Down payments below 10% are possible but the rate of interest goes up.
Bridge financing- It helps you to get past your timing squeeze, these are short term loans.
Builder Financing- This offers the builder to offer a menu of financing options to qualified buyers. But before opting for this shop around and see and compare the package offered with competing sources.
With your records gathered in advance, and knowledge of your credit score and know-how of different financing options the process of finding the best financial alternative for your dream home which satisfy your unique needs will be faster, easier and efficient.
Read More About………..Your Guide To Home Loan Overdrafts