Getting A Home Loan In Tacoma

Mortgage lenders are financial institutions that lend money to people so they can buy a property that they can’t yet afford, but should be able to by the end of a mortgage term. Once you have decided you are interested in buying a home and before you actually begin the home purchase, it is a good idea to get an overview of home buying and homeownership. There are important factors in a mortgage loan package that will determine whether you can afford the house, you want. The most important of these are the interest rate, Points, Mortgage Type (fixed rate, adjustable rate, balloon etc.), Closing costs and fees, and Down payment and mortgage insurance. Different lenders will offer different interest rates, so it is important to shop around. Another detail to consider is what type of mortgage loan is best for you. Common options include a fixed-rate mortgage, in which the interest rate does not change or an adjustable rate mortgage will have a fluctuating interest rate based on market conditions. Since no one knows how the market will behave, adjustable-rate mortgages are riskier than fixed-rate mortgages Lenders determine your ability to pay back a mortgage by making sure that monthly payments of principal, interest, taxes, and insurance (PITI) do not exceed 28 percent and that monthly debts do not exceed 36 percent of your gross monthly income. Besides looking at straight numbers, lenders determine your ability to repay a mortgage debt by considering what kind of job you have or if you have dependents and what other financial obligations you carry. Lenders also consider your credit history and the value of the property you are buying. If you are a homeowner looking to refinance or get a home equity loan, be wary of predatory lenders. Predatory lenders promote quick-fix financial solutions in order to convince potential homebuyers to invest in properties that they are unable to afford. Contractors who offer you financing may also be associated with predatory lenders. While legitimate lenders use marketing techniques also employed by predatory lenders, predatory lending often is marked by telephone, door-to-door, direct mail, Internet and television solicitation that advertises “bad credit, no credit, no problem” loan programs. Organizations like ours, PNC Mortgage, can help with identifying and avoiding the high rates and fees of predatory lenders.