The first step in obtaining a loan is to determine how much money you can borrow.  In the case of buying a home, you should determine how much home you can afford even before you begin looking. By answering a few simple questions, we will calculate your buying power, based on standard lender guidelines.

You may also elect to get pre-approved for a loan that requires verification of your income, credit, assets, and liabilities.  It is recommended that you get pre-approved before you start looking for your new house so you: 

Look for properties within your range.

Be in a better position when negotiating with the seller (seller knows your loan is already approved).

Close your loan quicker.

Home loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each.  Whether you are buying a home or refinancing, there are 2 basic types of home loans. Each has different reasons you'd choose them.

1) Fixed Rate Mortgage

Fixed rate mortgages usually have terms lasting 15 or 30 years. Throughout those years, the interest rate and monthly payments remain the same.  You would select this type of loan when you:

Plan to live in home more than 7 years

Like the stability of a fixed principal/interest payment

Don't want to run the risk of future monthly payment increases

Think your income and spending will stay the same

2) Adjustable Rate Mortgage

Adjustable Rate Mortgages (often called ARMs) typically last for 15 or 30 years, just like fixed rate mortgages. But during those years, the interest rate on the loan may go up or down. Monthly payments increase or decrease.  You would select this type of loan when you:

Plan to stay in your home less than 5 years

Don't mind having your monthly payment periodically change (up or down)

Comfortable with the risk of possible payment increases in future

Think your income will probably increase in the future

By carefully considering the above factors and seeking our professional advice, you should be able to select the one loan that matches your present condition as well as your future financial goals.