Applying for Housing Loans in 2021: Know How and When

Usually, the first step towards owning a new home is to pre-qualify for a mortgage. This might come as an overwhelming task but it’s necessary. Here are some information that can definitely help you figure out how and when to apply for a loan in 2021.


Pay Attention to Falling Rates

Always keep track of the interest rates set by the Federal Reserve. These interest rates set the floor on lending for lenders. Borrowing when there is a downward trend is always a good idea. If the trend has had the rates plateau for a bit, though, you may want to move faster—this could be a sign that the rates are going to go back up.


Look at Loan Types

Another good way to figure out how to apply for a loan is to look at the types of loans that are out there. If you are a first-time homebuyer who meets certain credit and income qualifications, you could look at an FHA loan to get a lower down payment. Other borrowers might be better served by VA loans or even conventional loans. Doing some research will help you to figure out which programs you should apply to and what kind of documentation you’ll need going forward.


Look at your Timetable

Think about your timetable. It’s usually a good idea to start applying to get pre-approved for a loan around the same time you get serious about looking at houses, though there’s not really a wrong time to start preparing your paperwork. Note that getting pre-approved too early can be an issue as you might have to resubmit paperwork, but applying ahead of time is usually recommended.


Talk to a Lender

When you’re ready to seriously start thinking about loans, you’ll definitely want to talk to a lender. While you can actually submit much of your pre-approval paperwork online, you’ll eventually need to talk to a lender to discuss the products that work best for you. Try to get quotes from several different lenders to find an interest rate and loan product that works for your needs.


The best time to apply for a loan involves looking at rates, but it also requires knowing when you’re looking to buy. When you’re ready, start shopping for a good loan product that’s going to meet your financial requirements. Getting a mortgage can sound scary, but getting through the process is easier now than it has ever been.


Source: Belnap, M. 2020. Home Financing Center. Housecall. RISMedia

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