Purchasing a new home in California is certainly an exciting but overly intimidating experience. A first-time home-buyer might want to reassess the benefits of apartment living when faced with terms like mortgage insurance, escrow, and counteroffer. However, with adequate preparation, you will not only be able to choose the best home loan in California but buy a home that meets your taste. Choosing a home loan with the lowest mortgage rate is an important aspect as it can save you a lot of money throughout the loan’s servicing period.
Here is a systematic process on how to choose the best home loan in California

Step 1: Get a referral to establish a baseline
To start with, you need to get a referral from a trusted person. Once you have identified a lender, get your credit score and discuss the available mortgage options. The first lender is critically important as the lender will give you information that can help you make informed decisions. The lender can assist you to make a comparison between conventional and FHA financing plans available in California. Five leading financial institutions that offer home loans in California that you might like to compare include Seal Beach, Los Altos Hills, Hillsborough, Rolling Hills, and Piedmont.

Step 2: Do your market research
Apart from relying on referrals, it is also imperative to do your own research. A better understanding of the market would enable you to negotiate for the best home loan in California. To begin with, you can get important information from online home loan lenders or you can shop around in person. One important aspect that you should endeavor to find out is the hidden cost associated with mortgage loans. An example of hidden cost commonly attached to home loans is the processing fee.

Step 3: Raise your credit score
A high credit score will get you a home loan with low-interest rates in California. With a credit score that is higher than 740, you can comfortably get the best home loan characterized with low interest in the market.

Step 4: Establish the duration of your stay in the property
If you have categorized as a risk-averse potential homebuyer then a fixed-rate mortgage plan will best suit. This is because a fixed-rate mortgage plan provides maximum financial safety. However, if you intend to dispose the property after some time you might want to choose a loan with a lower interest rate. An example of a loan that comes with a low-interest rate is a 5/1 hybrid mortgage plan where you end up paying 1 percent less as compared to other convectional plans currently available in California. Van Nemec

Step 5: Make a substantial down payment
By now you should have settled on a lender who will offer a home loan that suits your specification at a low interest rate. Making a substantial down payment can further lower your mortgage interest rate as it deepens your starting equity stake. As such, a large initial deposit will pose you as a low risk potential homeowner to a potential lender.

Bottom line

It is certain that when buying a home in California you not only need to identify a home but also choose the best home loan in California. You need to know and understand the terms offered by different lenders in the market. Once you settle on a lender, negotiate to get the lowest mortgage rate, close the deal, and be a happy new homeowner.