Financing Guide



Most lenders value their customers and want to give them the best  possible loan. If you have good credit, or can improve it with a little  extra effort you may qualify for a loan with a reasonable interest rate.  Be wary of promises of easy money because it could be a costly mistake.  Make sure the loan is the right amount, from someone you trust, and has  a monthly payment you can afford.

Steps to Getting the Best Loan:

  • Shop around for the best loan for your situation. Call more than one  bank, savings and loan, or mortgage company. Check in the business or  real estate section of your local newspaper to confirm current interest  rates.
  • Borrow only the amount you need & can pay back. You may be  encouraged to borrow more than you need. Before deciding on a loan, be  clear about how you will use the money and how you plan to pay it back.
  • Understand exactly how much the entire loan will cost. Review the  complete payment schedule. Be sure to find out how much you will have  paid in total at the end of the loan period. Beware of loans with one  large balloon payment at the end. If you have difficulty making the  payments at the end, you may have to refinance it which can cost you a  lot more money.
  • Make sure loan fees are reasonable. Usually loan fees should not  exceed five percent of the loan amount unless you have a really low  interest rate. There may be some other special cases where the loan fees  are high, so if you are unsure, ask a trusted advisor such as a non  profit agency.
  • Read every word of the loan document. Make sure you understand the reason and effect of every loan term before you sign it.
    Don’t be pressured into signing a loan you cannot afford. If you do, act  fast. You have the legal right to cancel or “rescind” a loan contract  when your home is used as a security for a home equity loan. This must  be done within three business days of signing the loan.