Ready to borrow for a house but not sure where to start? You don’t need a finance degree to get a good deal. Below are the most useful tips that cut costs, boost approval odds, and keep the process stress‑free.
Your credit score is the first thing lenders look at. A score above 720 usually lands you the lowest interest rates, but even a small bump can save you hundreds over the life of a loan. Pull your free credit report, spot errors, and dispute them. Pay down any credit‑card balances that are over 30 % of the limit – this alone can raise your score in a month or two.
Most mortgages require 5‑20 % down, but the higher you put down, the lower your monthly payment. If you’re short on cash, look into first‑time‑buyer programs in North Carolina – they often offer grants that cover part of the down payment. A $10,000 grant can turn a 5 % down payment into a 10 % one without you cramming extra savings.
Another trick: keep your savings in a high‑interest account until you’re ready to pay. The extra interest may not be huge, but it adds up and shows lenders you have liquid assets.
Don’t settle for the first mortgage quote you get. Different banks, credit unions, and online lenders have varying rates and fees. Ask each about loan‑origination fees, appraisal costs, and any “hidden” charges. If a lender can’t match a lower rate you found elsewhere, see if they’ll waive a fee to keep your business.
In 2025, many sellers are open to buyer rebates – a small kickback from the broker that reduces your closing costs. It’s perfectly legal, but you have to ask up front.
North Carolina offers a down‑payment grant and several loan programs with favorable terms for first‑time buyers. Eligibility usually hinges on income, credit score, and the property’s location. Fill out the application early – paperwork can take weeks, and you don’t want to miss out because of a deadline.
Remember, some programs require you to stay in the home for a set period, usually three years. If you plan to move sooner, weigh the benefit of the grant against the resale restrictions.
If a traditional 30‑year fixed mortgage feels out of reach, explore shared‑equity deals or FHA loans. Shared‑equity lets an investor cover part of the purchase price in exchange for a slice of future appreciation. It reduces your upfront cost but means you’ll share any profit when you sell.
FHA loans accept lower credit scores (often 580) and smaller down payments (as low as 3.5 %). The trade‑off is mortgage‑insurance premiums, but the overall monthly cost can still be lower than a conventional loan for borderline borrowers.
After you’ve locked in a rate, avoid opening new credit lines or taking out big loans. Lenders can re‑check your credit before closing, and any new debt could raise your debt‑to‑income ratio, jeopardizing the deal.
Even a short‑term personal loan or a car lease can tip the scales. If you need to borrow for moving costs, use cash or a credit‑card you can pay off immediately.
Follow these borrowing tips, stay organized, and you’ll walk into the closing table with confidence and a better rate. Happy house hunting!
Everything you need to know about borrowing $100k from a bank: detailed steps, smart tips, approval requirements, and pitfalls to avoid. Updated for New Zealand in 2025.