A guide to countrywide home loan in US is uber important as getting a new house is one of the biggest purchases you’ll make in your life so you might want to explore every home loan option available before making a choice.
Just like houses, home loans come in different shapes and sizes, each with its own requirements.
Securing a home loan is a huge, lifetime investment, which is why it is pertinent to pick the right package and the right financial partner.
In this article, we’ll be discussing some of the things that you need to be familiar with when you’re considering getting a home loan in the US, whether you are a permanent or non-permanent resident.
Key steps to take Before Submitting an application for a Home loan
Before deciding to apply for a home loan, below are some steps to take in order to smoothen the process:
1. The first step is to confirm that your credit score is great and your credit report doesn’t have any error.
2. Secondly, you need to think of the type of mortgage you want, as there are different types of mortgages, all with their own interest rate and requirements.
3. Thirdly, conduct a research on lenders in the US and compare so you can know which one has the best deal for you.
4. The fourth step is to get preapproved to borrow at a given loan amount.
5. Next, gather your loan paperwork.
6. Now you’re ready to go find your perfect home.
A Step-by-Step Guide on How to Apply for a Home Loan in the US
Once you’ve conducted your research and you’ve settled on a lender to use, below is a simplified step-by-step process on how to apply for a home loan.
1. Fill out a home loan application: The first step is to fill out a home loan application either online or by visiting a lender’s office. The requested information usually includes your finances, debts, assets, employment, the loan and the property. It is advisable to apply to multiple lenders.
2. Analyse your Loan Estimates: Since the first step included you applying to multiple lenders, the second step is to use your Loan Estimate forms to compare terms and costs and pick the best deal for you.
3. Pick a lender and commit: Once you’re done comparing, the next step is to pick a suitable lender and commit to them.
4. Loan processing: Once you’ve made a choice, the lender then takes its time to analyze every bit of information that you provided and asks you questions whenever the need arises.
5. Underwriter: The next step is for the lender’s underwriter to judge the risk of giving you this home loan and find out your capability to pay it back.
6. Loan cleared: The final step is for the lender to clear the loan and disburse it so you can go get your dream home.
How to be Eligible for a Home Loan in the US
When it comes to being qualified for a home loan in the US, it is virtually impossible to provide one particular set of requirements that would apply to the entire country, as eligibility criteria vary from state to state.
That being said, here are some general eligibility factors that lenders consider before approving home loans:
1. Affordability: Lenders in the US usually look for a debt-to-income ratio below 29%.
2. Age: Most lenders in the US usually set an age cap of 75 as to when the loan expires. This means that the age limit set by lenders for when borrowers can pay back is 75. However, this doesn’t mean people who are older can’t borrow, it just means that they will need to find a lender who looks at applications on a case-by-case basis.
3. Employment status: Employment status is another eligibility factor that lenders consider before approving a home loan. In most cases, people who are self-employed have a higher chance of getting a home loan from specialist lenders as most mainstream banks are worried about a source of income that might start to fluctuate in the future.
4. Credit worthiness: Also, a lender would need to assess your credit history, either locally or internationally, so as to estimate your credit worthiness.
5. Green Card: Another criteria for getting a home loan is whether or not you have a green card. Obviously, this criteria is only for people who are not US citizens.
Getting a Home Loan as a Non-permanent Resident of the US
If you’re not a US citizen, getting a home loan is not impossible but the process is a little different for you and you would have to provide some additional document or information before lenders can approve a home loan for you.
1. You need to have a green card and if you do not, the lender may ask you to provide evidence of your work status (probably a work visa and your social security number), this assures them that you are there for the long term, and won’t just up and leave tomorrow.
2. Another thing is that you would need a deposit amount that ranges from 20% to 30%.
3. If you don’t have a green card and you want to get an FHA home loan, you will have to prove that you intend to use the property as your permanent residence.
4. Also, interest rates on your home loan might be higher.
Types of Home Loans in the US
When buying a house, there are dfferent types of mortgages to choose from, each with its own advantages and disadvantages depending on what you’re looking for.
This type of home loan gives you the chance to continually pay the same amount throughout the term of the loan. The borrower is expected to pay a fixed amount to the lender each month since the interest rate on the loan remains the same.
Being the most prevalent home loan offered in the US, conventional mortgages have a fixed rate and a term that is usually as long as 30 years.
This home loan rate is adjustable in the sense that, the payment that the borrowed makes depends on the national and market interest rates, meaning if these rates rise, so does the borrower’s payment and vice versa.
How it usually works is that, banks will offer a fixed rate for the early years of the home loan, and then the adjustable rate applies around the seventh year.
Benefits of using a Broker (as a non-permanent resident)
As a non-permanent resident in the US, it is advisable to use a broker as they provide you with the following benefits:
1. They provide you with access to international lenders who offer great deals but do not advertise to the general public.
2. A competent and experienced broker will be able to equip you with current international tax rules.
3. A professional broker should be able to get you the best deal and rates in the market.
4. Their wide range understanding of the property markets locally and internationally will also do you some good.
5. They are in the best position to assess your finances and advise you if getting a home loan is the best option or not.
6. A competent broker can introduce you to the right lender so you can access unique borrowing arrangements that are suited to your situation.
Top Home Loan Companies in the US
There are numerous home loan companies in the US which a borrower can always consider borrowing from and here are some of the trusted amd helpful
1. Rocket Mortgage.
2. JPMorgan Chase.
3. U.S. Bank.
4. Fairway Independent Mortgage.
5. Citizens Bank.
6. PNC Bank.
8. United Shore Financial.
9. Wells Fargo.
10. Bank of America.
12. Veteran United Home Loans.