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Financing Basics - Fairbanks Real Estate

907-322-9188

Taking the time to know the financing basics can save you a lot of stress and money down the line. If you take the time to learn how the system works, you can make educated decisions helping you along the process of buying or selling real estate.

Always feel free to contact me with any questions or if you need any clarification. I'm always here to help. Click the link to Contact Me.

What to Know About Successful Financing

Get pre-approved. This step is so quick and easy some people forget to do it. When you get pre-approved, you will have a completed credit application with a certificate guaranteeing a mortgage for a specific amount. Instead of wasting time looking at houses you can't afford, you can spend that time looking at a dream home in your price range. 

Look at your finances. Figure out what kind of payment fits into your budget. Take into consideration costs like insurance, taxes, interest, and principle. 

What type of loan is best for you? Do your research and compare different loans such as adjustable rate and fixed-rate mortgages. It's always smart to think ahead when considering loans. Consider where you'll be in 15 years, what obligations will you have? 

Check your Credit Report. Check your credit report before your lender does. This will allow you to be ahead of the game and fix any inaccuracies there might be.

Lender.

While considering lenders, look at loan costs which may include the following:

• Interest rates
• Broker fees
• Points (each point is one percent of the amount you borrow)
• Prepayment penalties
• Loan Origination fees
• Credit report fees
• Appraisal costs

Applying for a loan. When applying for a loan make sure you have all necessary documents with you. These include: job tenure, income, employment stability, assets, and liabilities. Also paycheck stubs, tax returns, and bank account statements. Check with your broker or lender for more specific details on which documents you need.

Lock your rate. Interest rates can change daily. To save money make sure to lock down your interest rate. Make sure to get your rate lock in writing which will guarantee you a precise rate and terms for a set amount of time. also try to lock in all additional costs to avoid changes which could cost you. Your lock-in period should be long enough to allow for processing time, 15 - 60 days is the usual time. Check with your lender for more specifics.

Pre-payment. Make sure to customize the way you pay your mortgage. You can knock years off your mortgage length by simply paying more frequently. This way you can also save thousands in interest. Making lump payments toward the principle or paying more each month can have the same effects. However, not every loan has a pre-payment option. Speak with your lender for more information.

Clear any financial problems. If you have credit problems or owe tax money, buying a home is still possible. Make sure to contact a financial advisor or tax resolution service to look at solutions that fit your needs.