Before you apply for a loan there are a few things you should do. First you should check your credit score. Credit scores play a major factor in your interest rate for your loan. You are allowed to get a free credit report once a year, so this shouldn’t cost you anything. If you have previously checked your credit score, you will still be able to check it, but it will cost you a few dollars. When it comes to reading your credit score, there are some things you should look over. First check for mistakes, nobody’s perfect and that includes the banks. Make sure your name and social security number are correct. You should check your credit score, the higher the score the better chance you have to get a better interest rate and larger loan amount.
After you check your credit score you should know how much you can afford to borrow. Just because you can borrow $2 million doesn’t mean you necessarily should. You will have to pay some type of interest, so remember to just ask for as much as you need, not want.
After you know how much you can afford to take out, it’s time to select which loan is best for you. There are many forms of loans you can take out each with the advantages and disadvantages. Fix
Fixed rate mortgages allow you to have the same interest rate and monthly payment for however long the loan is. These loans are generally long term and can range from 15 – 40 years. These loans are good for people who plan on staying at their current home for many years, want the security of regular payments without changes, and people who think interest rates are going to go up.
Adjustable loans are another possibility. Adjustable jumbo start off as a fixed rate loan and then become an adjustable rate loan after a certain amount of time. Adjustable loans will start off as fixed loans for either 6 months, 12 months, 2, 3, 5, 7 or 10 years, then turn into an adjustable loan. These jumbo loans will have a fixed rate period then they become an adjustable rate mortgage. These loans are good for people who plan on leaving there home in 3 years or less and think that interest rates are going down.