You have probably heard of the word “mortgage” if you are planning to buy a house in Hawaii. However, do you know what it means? Do you know how to choose the right home loan for your needs?
Well, you shouldn’t worry because you aren’t alone. Finding the right mortgage is a piece of regular advice. However, it can feel overwhelming and tedious in practice. Because of this, we’re going to help you.
Aside from getting a Hawaii BAH (Basic Allowance for Housing), here are several tips you can follow to choose the right mortgage:
Look For at Least 3 Lenders
When it comes to choosing the right mortgage lender, you will have to get estimates from at least 3 different lenders. If you do not have any particular lenders in mind, it is a wise move to ask friends and family for recommendations.
Aside from that, you can also read reviews online and research lenders until you find some that you think are reliable.
Prepare Your Financial Papers
Every lender will ask for copies of a couple of vital financial papers when you start asking for estimates. Because of this, it’s ideal if you can get the documents ready now. Not all lenders are the same. However, there’s a general list of papers that you might need to provide.
- Asset and Bank Statements
You will have to offer recent statements for any bank accounts in your name, as well as other assets such as 401(K) and IRA.
- Tax Returns
You will have to offer two years of tax returns if you are self-employed and do not have a W-2.
- Pay Stubs
If you work a traditional 9-5 job, you’ll have to offer copies of a recent pay stub. Make sure the pay stub listed your year-to-date income.
If you work for a company, the lender will ask for at least 2 years of W-2 documents.
Ask for Estimates
After you prepare your documents, you can contact or visit each lender. You need to tell them that you want an estimate for a house loan. Then, the lender will ask for copies of your financial documents and ask for your permission to conduct a credit inquiry.
You shouldn’t worry if you’ve got several inquiries on your credit report. The credit bureaus will consider several pulls as one if you ask for all of the estimates within the same time frame and the same kind of loan.
The exact time frame that you’ve got to work within differs from one credit bureau to another. A couple of them can provide 45 days, while some can give 14 days. Because of this, it is a wise move to gather your estimates as fast as possible.
Choose the Ideal One
Once you get all the estimates, look them over. For ideal results, you’ve got to ensure you have given every mortgage lender the same details. This will help you make a precise comparison.
While you’re reading the estimates, you’ve got to ensure you look at the fees and interest rate that you need to pay.