The credit markets have tightened. For some it will be difficult to get a loan. But for others, it’s a fine time to borrow. If you’re considering a loan, these 5 simple steps will help you evaluate your options and make the right choices.
1) Review your current loan
If you have an adjustable rate mortgage, now may be a good time to refinance into a fixed-rate option before rates go up. First, review the details of your current loan. When is your rate due to adjust? What kind of increase should you expect? Does your loan carry a prepayment penalty?
2) Check your credit score
It’s vital to know both your credit score and what’s on your credit report before you shop for a loan. The three main credit bureaus have set up www.annualcreditreport.com where you can order your credit report once each year for free. If you’re serious about getting a mortgage loan right now, it’s worth the small charge to get your actual credit score as well.
3) Shop your loan
Shopping for interest rates from multiple lenders will help you secure the best rates and terms. Whether you use LendingTree.com to obtain multiple offers with one simple form, or shop the loan yourself, make sure you engage multiple lenders to understand your options.
4) Make sure you can afford it
The costs of owning a home extend far beyond the mortgage payment. Be sure to consider property taxes, homeowner’s insurance, maintenance and other costs. Our free Home Affordability Calculator can help you figure out what price home you can afford.
5) Do your research
Now more than ever, you need to research your mortgage options. The LendingTree Smart Borrower Center offers calculators, tools and lots of expert advice to help you decide what’s right for you.
LendingTree is committed to helping you make smart borrowing decisions, even if the smartest decision for you right now is not to borrow.
Stay up to date on the latest tips and tools by signing up for our monthly Smart Borrower eNewsletter. You’ll get the information you need to make smart borrowing decisions.