Homebuyers in Fairbanks, Anchorage, North Pole: 4 Tips for Getting the Best Mortgage
There are many moving parts to the home buying process aside from securing a mortgage—house hunting, selling your current home, saving for a down payment— and you may not be focusing enough of your attention on finding the best loan. In addition, if you're a first-time homebuyer in Alaska or have simply been out of the market for a while, understanding the mortgage terms and conditions can be difficult enough. Madden Real Estate is here to guide you every step of the way, including partnering you with the best local financial experts.
But before you sign any mortgage-related documents, here are four tips to ensure you're getting the best loan for your home in Fairbanks, Anchorage, Eagle River, Palmer, Wasilla or North Pole:
Get your credit report readyThis is one of the main factors in determining if you will be approved for a loan and what kind of rates you will receive. Take the time to review your credit report and correct any flaws that you notice— these can take months to resolve, so plan ahead! With even a few errors on your credit report, you could lose points and your lender will take note. You could miss the best possible rates and if your score is falling behind, you could risk being denied for the loan altogether.
Pay attention to your Debt to Income Ratio (DTI)
Lenders will take into consideration the amount of money you owe versus the amount of money you make when determining if you're qualified for a loan. If possible, try to reduce your debt or even increase your income before applying for a mortgage. Pay off any outstanding loans, pay down credit cards and avoid making any further big purchases before buying a home. All of these can help you potentially save money over the life of your loan.
This is a common mistake numerous homebuyers make when preparing to buy a home in Alaska. It is worth your time to shop around for mortgage rates! In fact, not doing so can be a mistake worth tens of thousands of dollars! You can gather rates online, in person, by phone— making sure you're providing the same information to each lender to accurately compare rates. Madden Real Estate is happy to suggest local professionals to assist you in this area.
Decide on the type of mortgage
Fixed-rate mortgages are not the only type available to homebuyers in Fairbanks, Anchorage, Eagle River, and Palmer. Factor in how long you plan to be in the home— if it is only a few years, you may want to consider a hybrid loan. Oftentimes, you can net a lower interest rate for a fixed period than the 30-year mortgage. Of course, the traditional 15 and 30-year mortgage rates are available to you if you plan to stay put for years to come or aren't comfortable with the risks involved with hybrid mortgages.
Buying a home is a big step and it's important to research, shop around and think through every factor when applying for a mortgage. Remember, Madden Real Estate has years of experience in helping homebuyers make these important decisions and we are here to answer any questions you might have!
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Real estate terminology can be confusing, especially if you're new to the real estate market! You may have heard the terms appraisals and closing costs, but do you know what those really mean? Do you know how escrow and equity apply to you?
If you will be going through the home buying or home selling process this year, here are a few real estate terms to get familiar with as you will hear them time and time again. Take a look at the real estate infographic below to clear up any questions you have about the terms involved in buying or selling a home in Alaska.