Bryan R. Ziegenfuse Guides You Through Residential Loans 101 and What You Need to Know
So you are ready to buy a home or you are thinking about purchasing one in the future: congratulations! You will probably be using a residential lending service to secure a loan (assuming you’re not paying cash for the house). The average new mortgage balance in the United States is $260,386, according to the Consumer Financial Protection Bureau.
When it’s your turn to take out a residential loan for your house, Bryan Ziegenfuse, a managing partner in a direct lender, said there are a few key things to keep in mind. A crucial component is getting your application for a residential loan approved, Bryan R. Ziegenfuse said. This depends on your credit score, how much your down payment will be (typically 3.5% is the minimum), your employment status, and how much debt you have.
People typically have a good idea of whether they will easily be approved for a mortgage loan in advance, said Bryan Ziegenfuse. It’s possible to check your credit score online (and find plenty of ways to improve it), spend time-saving your pennies and paying down debt. Residential lenders evaluate all these angles to determine whether you will receive a residential loan, so take your time and be prepared, Bryan R. Ziegenfuse advised.
Another helpful step is to get pre-approved for a residential loan, Bryan Ziegenfuse said. This is another way to be prepared and not get invested emotionally in a house you simply can’t afford right now. Pre-approvals let you know how much house you can afford and what interest rate you will pay on your residential loan. However, do not just go by the amount you are pre-approved for by residential lenders, Bryan R. Ziegenfuse cautioned. Know your budget and how much you can realistically afford so you do not end up living in a house that you are not able to pay for. Just because residential lenders tell you-you can afford to pay a certain amount does not mean it necessarily fits realistically into your lifestyle.
When it comes to residential lending, people can grow discouraged and disappointed if they are not approved for a loan right away, Bryan Ziegenfuse said. If this happens to you, it does not mean you will never own a home. There are ways to improve your chances of meeting the qualifications for a loan. Work toward goals that will help you buy your dream home, whether you need to improve your credit score, pay down debt, save up for a bigger down payment or find a higher paying job.