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Applying for the loan is one of the most stressful elements of purchasing a home for a buyer, but it doesn't have to be. I'm very connected with various lending companies in Algonquin, and they've helped me realize some things that make the process of applying for a loan effortless.
1 – Compose a list of questions about your loan program
Make sure to have a list of questions with you if you find that you do not entirely comprehend the advantages and disadvantages of the different programs. It is often a challenge to understand the characteristics of both fixed and adjustable rate mortgages. I or one of my lenders will be able to help you understand the advantages and disadvantages of both programs.
2 – Decide when you want to lock
When you lock in a rate, it denotes that your mortgage lender guarantees the interest rates for the loan – usually at the time the loan application is submitted. By floating the rate, you can lock the rate at any time between the loan application day and at the time of closing. Those who prefer to float believe that the interest rates will fall in the near future. Click here to see the outlook for the next 90 days of interest rates.
3 – Decide if you want to pay additional points to reduce your interest rate
If you elect to pay additional points to lower the interest rate of your loan, you'll pay for them in cash at the time of closing. Each point is 1 percent of the mortgage loan. To decide if buying points is right for you, click here to use our points calculator.
4 – Bring your paperwork
Obtaining a loan requires lots of paperwork, so you should spend some time getting your documentation together. Click here to get a list of typical loan documentation.