(NAPSW)Not only are more people moving toward online banking
(62 percent, according to an American Bankers Association survey),
theyre also using the Internet to research such big decisions as
selecting a home loan. A survey of homeowners by Wells Fargo found
that nearly half visited their financial institutions website to
learn more about products and services. Knowing your goal, what
questions to ask, what information and documents to have available
and your credit score can save you time and money and keep you on
the path toward sustainable homeownership. A home loan is one of
the most important financial decisions most people will make and
the difference in a few key variables can have a significant effect
on your borrowing costs over the life of the loan. Here are a few
questions and answers you may want to consider when researching
your home financing options: What type of loan do I need? There are
two basic categories of home loans. A mortgage loan can be used to
purchase a home or to refinance an existing mortgage. A home equity
loan or line of credit lets you access your homes equity to fund
such things as home improvements or large purchases, or consolidate
outstanding debts. What will the money be used for and how much
could I borrow? Whether youre buying your first home, fixing up an
existing home, refinancing, looking for a home equity line of
credit or trying to identify ways to manage existing debt,
researching how much you can borrow is an important step. Credit
experts, such as the National Foundation for Credit Counseling and
others, suggest spending no more than 28 percent of your monthly
pretax income on housing payments, which include principal,
interest, property taxes and insurance. Should I get a fixed- or
adjustable-rate mortgage? Depending on your personal financial
situation, either choice could be an option for you. If youre
planning on staying in your home for a long time, a fixed-rate
mortgage may be a good choice since it offers predictable monthly
payments and guarantees that your interest rate will not increase
over the life of the loan. However, if youre planning to refinance
or move within a few years, an adjustable-rate mortgage (ARM) might
be better. Typically, ARM loans have lower initial rates and then
adjust within a predetermined range, usually annually. Learn More
For online calculators, product comparisons, checklists, guides and
other information on the entire homeownership life cycle, visit
www.wellsfargo.com/mortgage/home-loans.
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