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How to Land a Loan When Buying a House in Chaska MN


Unless you’ve won the jackpot, received an enormous inheritance, or are Bill Gates, you’re probably going to need a loan to buy one of the homes for sale in Chaska MN. Mortgages are one of the most important aspects in the home-buying process, in large part because they help determine just how much home you can afford. Qualifying for a loan is also one of the most stressful aspects due to the amount of paperwork and the potential for past financial mistakes to come back and haunt you. Once you feel confident that you have the income, savings, and credit score to help you get a loan, here’s how to start the process.

Most people turn to a bank or broker to help them get a loan. Those who turn to a bank typically use the bank that they already work with for their regular checking, savings, and other financial matters. However, you aren’t necessarily going to get the best deal with your bank. Shopping around can find better options. Alternatively, if you don’t feel comfortable doing the work in looking for a better deal and weighing the options, a broker will work to find the best deal for your specific situation. The downside is that there is a broker’s fee at the end of the process.

When working with new home builders like Key Land Homes, you should talk to your counsellor to find out which lenders they recommend. Their preferred lenders are familiar with the needs and processes involved in financing for new home construction.

The amount of time you plan on living in your home plays a role in the type and length of loan you should choose. Most mortgages are for 15 or 30 years. With the 15-year mortgage, your payments are higher, but you pay less interest over the long run and you obviously pay off your home faster. With the 30-year mortgage, you have lower monthly payments, but pay more interest over time. Of course, you can always make bigger monthly payments to pay it off more quickly, but if you run into difficulty, then you can revert to the lower monthly payment.

If you don’t plan on staying in your home for more than 10 years, an Adjustable Rate Mortgage (ARM) may prove the better choice. You typically get a lower starting interest rate for the first five or ten years, before the rate then starts fluctuating depending on the market. If you plan on selling before your initial set rate is over, this may be a solid choice. If you plan on staying in the home for longer, a fixed-rate mortgage may be more secure. As past decades have show, economies can change drastically and locking in on an affordable interest rate now may prove to be a wise move ten years down the line.

Unless the market is incredibly volatile and your monthly mortgage rates can’t go above a certain level, locking in a specific rate for a specific amount of time leading up to the purchase of one of the homes for sale in Chaska MN probably isn’t necessary, particularly as it also comes with a fee.

There’s not usually a lot of wiggle room in negotiating interest rates, but you may be able to negotiate some savings on lender fees. It is worth taking a look and this is where a mortgage broker can sometimes be extra helpful. If you’ve thought carefully about how much you can afford and chosen the type of loan that is likely to benefit you now and in the future, you should come out of the process in a strong position, ready to purchase your new Key Land home.

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