How To Get A Bank Loan To Buy A House

Step 1: Before you decide to buy house with home loan, it is important to fix the budget and arrange atleast 20% funding from own sources. Reason being banks will only lend you 80% of property cost as Home Loan. You may check my post 8 Steps Financial Planning before you buy dream Home

Here are some tips to help make finding the right home loan as easy as possible. Depending on your lender and the type of loan you choose, your required down payment can range from 2.25% to 20% of the purchase price of the home. Establishing a monthly budget will help you put away enough money for your down payment.

The bank loaning the money is the lender . The amount you pay to the bank each month is your mortgage payment. The rate of interest on the loan is the mortgage rate (or the interest rate ). If you don't make your mortgage payments then the bank will repossess the house. (This is called foreclosure .)

If you won’t be able to come up with a large down payment, then you should look into an FHA loan, which helps home buyers who can only make a small down payment. Having a good credit score puts you in a position to attract the best deal on your home loan.