Know What to Look for in a Home Loan


Home mortgage interest rates are still at record time lows but will unlikely stay this way in the future. Whether you are considering your first home or looking to buy or refinance your existing property, a home loan right now is a move that can be a huge benefit to your personal portfolio.

Before looking at the best mortgage options, finding out if you are eligible for a loan needs to be the first action to take. A mortgage company is taking a gamble that the future 15-30 years is going to keep on a consistent upward trend. Good credit, longevity in employment, a substantial down payment, and the ability to make loan repayments regularly are a priority to a lender. Lacking in any of these areas could get you turned down for a loan or be forced to consider a loan at a higher interest rate that what you were hoping for.

Home loan practices have changed over the past decade and familiarizing yourself with the options in types of mortgages and loan repayments can prepare you for a financial payback that you can afford. A fixed rate home loan will lock in your loan repayments for a certain period of time so you don’t have to worry about rising interest rates. You can budget for a specific amount each month without worrying about your loan repayments changing. Although this type of loan gives you a certain peace of mind, there are a couple of drawbacks. There are limited additional payments so you cannot pay ahead and there are penalties for early payout of the loan.

A variable loan is more flexible in features. The payment moves up or down depending on the fluctuating interest rates but you are allowed to make additional loan repayments without being penalized. You can also borrow against any additional funds that have been paid toward the home loan. Borrowers are allowed to pay off a variable home loan early without any additional fees.

Knowing how much your loan repayments are going to be and whether you are in a position to make is an area that your mortgage company can calculate for you. Items such as property tax, homeowners insurance and life insurance on the property can be added to the yearly cost if this is more convenient for you. Also the amount of years that you wish to finance for will raise or lower your payments. Going with a shorter term will cut your mortgage interest fees but never strap yourself for funds by increasing loan repayments that you cannot afford.

There are many different areas to consider when looking for a loan. Select a reputable mortgage company that has a past track record with homeowners. Steer clear of start up companies that promise you great interest rates and early payoff. There is usually something that is not being disclosed and may show up later when least expected. Work with someone that you trust and don’t be afraid to ask questions. A home loan is a future and you have a right to know all the facts.

Home Loan

borrowing is like once in a life time decision and much is at stake. Home loan practices have changed over the past decade and it is important that you undertake a

home loan comparison

to find out what loan is right for you.


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