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The Ultimate Home Financing Guide

Congratulations! You’re ready to buy a home. But before you start scouring the MLS, you need to secure a home loan. Use this guide to learn about some of the most common types of mortgages and which one works best for you.

The Ultimate Home Financing Guide
The Ultimate Home Financing Guide

The three most popular types of loans:

Fixed-Rate Mortgage
This is the most common type of loan, and for good reason. With a fixed-rate mortgage, the interest rate remains the same throughout the loan’s duration, which is typically 15 or 30 years.

Who should use this loan?  Those who are interested in consistent housing payments or don’t plan to move anytime soon.

Adjustable-Rate Mortgage
An adjustable-rate mortgage is a loan with interest rates that can change periodically. This type of loan typically begins with lower, fixed payments at an introductory rate. Following this introductory period the interest rate adjusts to current market rates.

Who should use this loan?
People who plan to quickly pay off their mortgage; people who plan to sell their home before their fixed-rate period ends.

FHA Loan
In an effort to make buying a home more attainable for Americans, the Federal Housing Administration offers FHA loans, which allow buyers to make a minimum down payment of as little as 3.5 percent.

Who should use this loan?
People who have a weaker credit rating and/or don’t have enough money for a large down payment.

At the end of the day, talking to a mortgage professional will help you decide which type of loan is best suited for you.

Hand with tiny house in the palm and key hanging from fingers

Application documents checklist

To be able to predict your financial future, lenders need to take a hard look at your past and present financial situations. Use this checklist to help you gather the necessary paperwork.

  • Bank statements
  • W2s from current and past employers
  • Paycheck stubs
  • List of all debts
  • List of all assets
  • Credit report
  • Residential address for the past two years
  • Landlord names and addresses for the past two years
  • Proof of timely rental payments
  • Divorce decree (if applicable)
  • Gift letter (if using gift funds)
  • Bankruptcy paperwork (if applicable)

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Kimmer Plunk

Based in Memphis and serving clients in West Tennessee and Northwest Mississippi. Serving others is a reward of its own and part of what makes me happy, and I've been doing that for 30 years through various activities including Girl Scouts, PTO, various board positions, unhoused ministry, and professional (award-winning) teaching. I treat others the way that I want to be treated including being readily available, listening to your desires, answering your questions thoroughly, and walking you through the home purchase process. My ultimate goal is to see that you find the home of your dreams and experience the least amount of stress during the process.

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