Taking out a home loan is a huge step in anyone’s life. Borrowing money in any form is a commitment that requires careful consideration. At Raleigh Cary Realty, we want you to be fully informed when the time comes to take out a loan.
Here are several things to consider before taking out a home loan:
- How long will it take to pay it off: Interest on a loan can be a hindrance to building up one’s retirement, 401k or any type of long term savings. If buying a home can be put off for a while in order to build up savings, consider this option before moving forward.
- What is the best value for me: It’s important to purchase a home that delivers the most value for one’s money. Investing in a townhouse, or condo in a growing area could be the best use of money especially for those buying their first home.
- Check credit score: When considering taking out a loan, perhaps one of the most important things to consider is the credit score. We recommend credit scores be at least 680. With a significantly lower score, an FHA loan could be an option, though more expensive.
- What type of loan: When it comes to home loans there are several to choose from:
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- Short term loans – typically mean less accumulation of interest.
- Long term loans – a higher accumulation of interest.
- Fixed interest rates – interest rates stay the same over a period of time.
- Variable interest rates – changes with the market, meaning it could be easier to switch loans in the future.
- Partially-fixed rates – a mixture between fixed and variable.
Still have questions about taking out a home loan? Contact us today to discuss financing a home. At Raleigh Cary Realty, we want to help find that dream home. If you are considering purchasing a home in the Raleigh or Cary area contact us today.
