No matter what your credit history is, or what your circumstances are, the Internet has made the home loan process much easier. This article will outline a five-point plan to assist you in your pursuit of financing online:
Step 1: Don’t be afraid to go shopping.
Discussing personal mistakes in life can paralyze us with fear, namely, getting into the “bad credit” issues. But getting into this “stuff’ is completely unnecessary in the preliminary phase of shopping for a loan, beyond the basic information provided in an online short-form.
In other words, you don’t really have to talk about the nitty-gritty details, until after a loan offer has been presented to you. So don’t fret about it at first.
Because we’re on the subject, if you are a consumer with credit history issues, let me briefly take this opportunity to state the obvious:
1. You’re no different than anyone else. We all live imperfect lives.
2. Credit problems do not make you a bad person, and are really just reference points.
3. There are loan products designed for you.
4. There are lending institutions that are interested in earning your business.
5. There is nothing wrong with you, or your credit, or your situation. You can find a loan.
First, get into the right frame of mind. Don’t be afraid to ask questions, and don’t be intimidated by your credit history. Be honest. Give truthful information. But don’t feel shame or regret for your past or present personal circumstance. They make you who you are, and that earns you respect.
Step 2: What’s the going rate?
Information is free, so why not be informed? Many resources are available on the Internet to get current interest rates, and it’s easy to compare them.
So to start with, take a look at two pieces of information:
1. Current Interest Rate, 30-year fixed
2. 6-month trend graph
A little exercise: Do you see the current rate? What about the 6-month graph? Are rates going up, down, or staying about the same? Is the current rate higher than it was 6 months ago? Lower then 6 months ago?
Now don’t feel the need to analyze this information too much. For now, just look at it, and perhaps, check it several times a week to stay informed. If you do this, you’re already 10 steps ahead of the game!
You are now an informed shopper. When an offer is presented to you in the near future, you’ll be able to ascertain how good an offer it actually is by knowing how it compares to the “going rate”. (Hint: Don’t forget to check terms and fees, also known as “points”, and conditions relating to your loan offer. Often times you will see higher points or less favorable terms, in exchange for a lower rate.)
You will be able to assess if you think rates are declining or on the rise, which may help you to decide if the present is the right time to make a purchase.
Step 3: Obtain several offers.
When you buy a car, do you seek out the best deal? When you go grocery shopping, do you consider which store offers the best prices? Shopping for a mortgage should not be seen any differently, and the best way to do this is to obtain several preliminary loan offers online.
1. Preliminary loan offers are simple, painless, and easy to get.
2. They contain the terms, rates, and pertinent information you need to assess the lenders.
3. They will take all the guesswork out of where you stand.
Get three or four offers and compare them. How do they compare to each other, and to the going interest rates mentioned in Step 2?
Many companies conduct searches for thousands of lenders, a lot of them in your local area, and they provide you with four loan offers almost instantly. Take advantage of this! These are no obligation services, and for the most part, the online application forms are simple. They take only a few minutes to complete.
You don’t need to get into your credit history at this point. Completing the simple form is all it takes. If you qualify, and a lender is located that wants to do business with you, then you’ll go to the next step, which is to discuss this possible opportunity over the phone.
Step 4: Remember this.
2. Remember that these are “preliminary” loan offers, which means no immediate commitment on your part. You complete a simple, on-line short-form, and then you get several offers in return. The lenders that made the offers may wish to talk with you over the phone, but that’s where the preliminary process ends. The ball is in your court to choose a product that meets your needs, or to keep shopping.
3. These services are offered for free and you should not be asked for any service charges any time.
Step 5: Understanding your Options
If you’ve followed this simple plan, you will discover that there are consumer loan products tailor made to meet everyone’s needs. Remember to examine the terms and rates, obtain several loan offers, and then talk to the lenders over the phone. Find out who they are, and whether or not you’d like to do business with them. Throughout this process, stay informed by checking interest rates, and settle for nothing less than what is attainable.