If you have decided to buy a new house for yourself, you have possibly made the wisest decision that you could ever have made. Living in your own home renders a kind of feeling that one has never experienced before. That is only the emotional part of it. Did anybody tell you that you are going to gain financially too, especially if you avail home loans? For the same amount of money, you not only get a permanent residence, you get tax benefit as well. Add to that the cost of regular shifting that living in a rented house involves. We did not mention the trouble involved in such shifting.

Actually, very few people have the ready money to buy a home and even those who have that, rarely use it. Buying homes with home loans have become the norm all over the country and Chicago is no exception to that. In Chicago home loans can be availed from various sources. Banks and other financial institutes are there, but other than that, you can contact mortgage companies for that.

A mortgage company is neither a bank nor any financial institute. They are different from the rest in that, they do not generally have the funds, but borrow it from banks and financial institutes to provide the loan to you. Of course, today, few mortgage companies also fund such an exercise, but most of them work with borrowed capital. They differ from mortgage brokers in that a broker is like a bridge between the borrower and the lender. They collect the relevant papers from the borrower and pass it on to the lender for underwriting and final approval. They neither originate nor fund the loan, but some of the more experienced brokers can help you to get the loan at a very reasonable rate.

However, unless you have a good credit rating you can never hope to get the loan under any reasonable terms and conditions. If you are not aware, credit rating of a person is actually an assessment of his ability of repaying a debt. Such an evaluation is generally undertaken by an independent credit bureau. They generally consider the following factors before deciding on the credit rating of an individual or institution:

Credit history of the borrower to see if he is a habitual defaulter.
Income of the borrower and his ability to pay the monthly installment.
Saving as well as spending pattern of the individual.
Current assets and liabilities that he may have.

Therefore, we see that to obtain the home loan at an affordable rate we must improve our credit rating. Otherwise, even the best mortgage broker in Chicago will not be of any help. Refinancing is another factor that you must keep in mind if you want to get the best out of your home loan. You can undertake such an exercise if the interest rates go down substantially or if you believe you can now pay a bigger amount to cut down the loan duration quite substantially.

Talk to home loan brokers or financial experts before you go for refinancing. Remember the difference has to be substantial to make any gain out of the while procedure or else the extra cost one has to bear will negate all the advantages you get out of it. Home equity is another important factor that you must be aware of to gain financially from your newly bought home and so let us go into that.

To understand what home equity is, you need to understand what fair market value of a property is. According to the US law, the price at which a property changes hands between a willing buyer and a willing seller, neither being under any compulsion and both having reasonable knowledge of relevant facts is its fair market value. Home equity is the difference between the fair market value of the property and the amount still payable to the lender.

Now, as the property value increases and your loan decreases, the equity too keeps increasing. You can tap this equity to get further loans if the need arises. Therefore, you can see how a home bought with home loans can be beneficial to you. This way you get benefits, you will never dream of getting if you still lived in that rented home. Only keep your credit rating high.

Author Bio: Article by John Hoots of ChicagoMortgageSpecialist.com, a website with the best Chicago mortgage lender and Chicago refinance information on the web.

Category: Finances
Keywords: Chicago mortgage refinance, Chicago refinance