The process of choosing a mortgage may seem complex, but you can narrow down your options pretty quickly just by asking yourself a few key questions.

In this post, we go over some of the same questions we might ask you during your consultation to help you determine what type of home loan will fit your needs.

8 Questions to Ask To Find Your Ideal Home Loan

1. What is your budget for a home? Before you start shopping around for a home loan, you should do some basic math. Calculate how much you can afford to spend on your home, factoring in mortgage payments, insurance payments, taxes, utilities, interest, and other costs of homeownership. Once you come up with an estimate, you can proceed.
2. How long will you live in your home? Another valuable question to ask yourself is whether you think you will only spend several years in your next home, or whether you plan to make it your home for the long term. This question can help guide you in choosing a format for your interest rate. Adjustable rates are usually best if you will only spend several years in the home. In most other circumstances, a fixed mortgage rate is most suitable.
3. How much do you have available for a down payment? Figure out how much you can afford to put down on a home. Different types of mortgages have different minimum down payment amounts. If you can only afford a small down payment or no down payment, you may want to lean toward government-backed mortgage products. But you should not rule out conventional mortgages. Their down payments can be very low with competitive borrower qualifications.
4. What is your credit score? Speaking of qualifications, you should also check your credit score before you apply for a mortgage. If your score is on the low side, there are some lending products that may be easier for you to qualify for, like FHA, VA and USDA loans.
5. Are you self-employed? You should consider not just your income, but how you earn your income when you are about to purchase a home. If you happen to work for yourself directly, you cannot use a W-2 form to apply for a mortgage, as is traditional. Thankfully, you can instead just apply for a self-employed borrower loan, using your bank statements to verify how much you earn.
6. How much do you need to borrow? Once you know your budget for a home, you also probably can figure out roughly how much financing you are going to need for the home of your dreams. If the amount you require is in excess of the conforming loan limits for your county, you need to look into a jumbo mortgage.
7. Where are you shopping for a home? The location where you are looking for a home is important not only for checking the conforming loan limits, but also to see if you might qualify for a USDA mortgage. This type of home loan backed by the US Department of Agriculture does not require a down payment and offers other benefits as well. You may qualify for it if you are buying a home in a rural location.
8. Are you a veteran? Your veteran status is relevant to the home buying process since based on your service record, you might qualify for a VA mortgage. As with USDA loans, VA mortgages do not require a down payment. They also do not require mortgage insurance.

Let Us Help You Find the Right Mortgage in Indianapolis or Beyond

You may already have a better idea what type of mortgage will suit you after reading this post. But if you still need additional help, Grandview Lending can go over your situation with you and help you identify an ideal lending product. Please call us today at (317) 255-0062 to schedule your consultation.