April 27, 2011
In this week's "Money Matters," with interest rates at historic lows it's doubtful you'll find a better time than now to buy a new home or refinance an existing mortgage.
Buying a new home is likely the biggest purchase you will ever make, but you must do your homework. Lending qualifications are more strict. However, there are institutions that are ready and willing to make loans.
The Kansas Credit Union Association has some tips for consumers shopping for a real estate loan.
1. Determine how much house you can afford. Set realistic goals by reviewing your budget and checking your credit report for accuracy. Those with less debt and stronger credit scores will qualify for higher loan amounts and lower interest rates. Don't forget to factor in costs like taxes and insurance.
2. Shop and compare your options. Compare rates at various credit unions, banks, thrifts and mortgage brokers. And remember that rates change frequently. So you should contact all of them on the same day if possible.
3. Educate yourself on pricing and fees, risks, and benefits. Ask questions about rates and fees. Some loans offer more flexible terms but charge higher settlement fees or penalties for early pay-offs. There are fixed rate, adjustable rate and jumbo loans, and each comes with different risks and benefits. Understand the options and which one best suits your needs.