Getting a New Jersey home mortgage loan can be an exciting process. New Jersey is a wonderful place to live and homes are typically a good investment. However, you shouldn't get so caught up in the excitement that you miss important information about the loan process. To help you out, here are three things you should know about mortgage loans:
Your Options Are Endless
The days of having only one mortgage loan program to choose from are long gone. Borrowers today have a whole slew of creative financing options available to them. There are balloon loans, interest only loans, 40-year loans, 80/20 loans, and dozens upon dozens of other loan programs to choose from. Before you jump on the first approval that comes your way, you should take time to investigate all of your options.
You Will Probably Have to Pay Points
Paying points on a New Jersey home mortgage loan is very common. Points are a way for lenders to make money on the loan. Borrowers may also pay points in exchange for a lower interest rate. One point is equal to one percent of your mortgage loan. The good news about points is that they are usually tax deductible.
Your Credit Affects Everything
Most people know that a low credit score will have an effect on the interest rates that they pay on a loan, but what they don't realize is that their credit score will also affect closing costs and PMI (Private Mortgage Insurance) premiums. Anyone with a credit score below 620 is usually considered a subprime borrower and can expect to pay higher costs on every aspect of their New Jersey home mortgage loan.
Visit New Jersey Lending Center for a list of New Jersey Recommended Home Mortgage Lenders , whether you are looking for home purchase, refinance or a home equity loan.