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Tips on Your Real
Estate Loan
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The median price of a home in the United States is somewhere in the
neighborhood of approximately $222,000, at least an 8 percent increase
in the past three years.
The loan you take out to start up your real estate endeavors, whether
it be to purchase a home for yourself or make a profit off of your real
estate purchase, is most likely going to be the most monumental commitment
you will ever make in your life, money wise at least. As with all the
other monumental commitments and decisions you make in your life, taking
out a loan to purchase property is not a decision to be made with haste.
You wouldn't purchase your home without shopping around to get the best
home for the best deal; in essence, you are purchasing a large sum of
money from your bank or mortgage company to make your purchase. That
fine black print on your loan contract is a tricky little thing called
interest, and a change in even a half percent can drastically affect
the price of the loan. Interest, in essence, is payment to the lender
for "allowing" you to use their money for your property purchase.
Your credit score is a clear indicator to a lender of your dependability.
If your credit score is on the low end of the spectrum, obviously a
smart lender wouldn't give you a loan (especially a large one) without
having you pay some type of penalty for it. It is for this reason that
bad-credit loans and such are not always the smartest idea, especially
when the amount of the loan starts to get up there.
Bad credit loans cost a lot more than a loan from a more traditional
mortgage lender, or even your local bank and trust would cost you.
Lenders can afford to issue loans to more dependable mortgagees who
have higher credit scores; the likelihood of them returning the loan
and making all of their payments on time is a lot greater than the likelihood
of a young college student freshly married and looking to purchase a
home. Not only is the more youthful traditionally seen as less responsible,
but chances are that they have little or no credit. Such a person would
not have had as much experience paying bills on time and fulfilling
their ends of the bargain when it comes to small loans at furniture
stores, store credit cards, and such as a 35-year old who has been in
the workforce for 15 years, married to the same person for 10 years
(getting a divorce CAN affect your credit, believe it or not) and been
leasing rental homes, making good on their leases and contracts they
enter into with the landlord?
Ensure that you enter into your loan agreement as fully informed about
the products available to you as possible. Keep in mind that a 10%
interest rate over the span of a normal 30 year mortgage loan could
double the face value of the loan, turning your $100,000 home mortgage
into $200,000 debt, or worse.
About The Author:
Peter Dobler is a veteran in the IT business. His passion for experimenting
with new internet marketing strategies leads him to explore new niche
markets.
Read more about his experience with real estate; visit
http://real-estate.online-business-idea.com
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