How Can You Finance Your Luxury Home?January 20, 2012
Buying a house is a big investment in itself. However, purchasing a luxury home is an even bigger deal. Because details involved in buying a luxury home can be a bit complicated compared to buying a regular one, you have to carefully plan on how you will pay for such a big purchase. Here are some tips when financing your luxe home:
Apply for a mortgage.
Whether you’re buying a regular or a luxury house, you either pay the whole price in cash (which is quite rare) or get a mortgage or home loan. When applying for a mortgage loan, keep in mind today’s tighter lending restrictions. For large loans, a hefty down-payment is also required.
Speed up the loan process.
When proving your state of finances, be sure to prepare all important documents. One key to a fast luxury home mortgage approval is to get a letter of pre-approval instead of a pre-qualification statement from your lender. Being pre-qualified for a loan means you must prove that you will be able to pay the mortgage on time. A pre-approval letter, on the other hand, signifies that your lender has already approved your finances. Plus, having a pre-approval letter allows you to negotiate with the seller for a better rate.
Once the mortgage for your luxury home is approved, make sure that you stick to the payment schedule. Missed payments can lead to skyrocketing interest rates.