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Job History

A good job history shows stability and reliability. In today's fast moving job market, an individual can have several jobs over a short period of time. The lender will issue a favorable profile if income growth accompanies these job changes. However, if successive job changes over a short period of time show the same or a reduction in income, it can be unfavorable from the lender's point of view.

Credit Profile

You have established a credit profile throughout your adult life. A track record of consistent monthly payments over a period of time weighs heavily on your credit report. The credit profile is only one of the factors used by a lender to determine the amount they will loan you for the purchase of a home. The appraised value of your home will also be used by the lender to determine the type of loan, the amount of the loan, and the down payment that you will be required to make.

Down Payment and Closing Costs

Depending upon your credit profile, and the price and location of the home, the lender will require a 3 percent to 20 percent down payment. Closing costs, title insurance, and commissions are expenses in addition to the down payment, and are not usually included in the price of a home. It is imperative that you discuss all financial matters with your broker, Eric Zaeske, and review all cost and deposits associated with the purchase of your home.


Loan Information

Types of Loans

There are several types of loans offered by lenders on a local and national basis. The two most common types of mortgages are fixed-rates and adjustable-rates. A fixed-rated mortgage comes with an interest rate that remains the same for the life of the loan. Adjustable rate mortgages are set up with interest rates that adjust up or down, depending upon current economic trends. These rates are based on the national money market index.

Mortgage Terms

The term or length of the mortgage is a factor when determining the total amount you repay on the loan. A 30-year mortgage is the industry standard, but 15 and 20-year term loans are also available. Short term loans offer lower interest rates, typically 1/4 percent to 1/2 percent lower than a 30 year mortgage. With a short term, low interest rate loan, you'll repay less than you would if you borrowed the same amount of money with a long term loan.

Financing Contingency Clauses

A mortgage escape clause is a must for buyers unless they're paying cash. Without this contingency, buyers can be legally obligated to purchase a home even if they are unable to obtain financing.

Monthly Payments

Even with the lower interest rate, the monthly payments for a short term loan are higher. Long term loans have smaller monthly payments and can be easier to budget. Consider all your current and future financial obligations to determine which type of loan will be more beneficial to suit your needs. Your broker, Eric Zaeske, will offer his expertise in helping you decide what kind of loan is best for you.