www.LynchburgRealEstateBrowser.com Volume 8 Number 12 – Say you saw it in The Real Estate Browser of Lynchburg — 21 as auto loans and student loans, and the terms of the loan you plan to take out. You may also consider speaking to a lender at this stage. If you qualify for a loan, he or she will provide you with a pre-approval letter stating how much home you can afford and the maximum amount you are qualified to borrow. Having this letter can help show the seller that you are a commit- ted and qualified buyer. Keep in mind that the amount your lender is willing to lend is not always how much you should borrow. You should borrow only what you feel you can comfort- ably repay through monthly mortgage payments. Wait to take this step until you are actually on the hunt, as pre- approvals are usually good for only a limited time. When determining your budget, consider the length of your loan and the type of loan you want. Do you want to pay back the money that you borrow over 15 years or 30 years? The longer your loan term, the smaller your monthly payments, but you’ll pay more interest over time. The type of mortgage loan is impor- tant, too. With a fixed-rate loan, the interest rate stays the same through the life of your loan, as will your monthly payments. While this can offer some peace of mind, it’s impor- tant to know that such loans tend to have higher interest rates because the lender isn’t protected against a rise in its costs over the course of your loan. On an adjustable-rate mort- gage (ARM) however, the interest rate may re-set every one, three or five years based on the movement of a specific index and the terms of the loan. Homebuyers may have low interest rates when they first take out their mortgage loans, but the rates may increase over the loan term. If your rate changes at a reset, then your monthly payment will change too. For a full run-down on all things homebuying, visit myhome.freddi- emac.com. One of the most important aspects of homebuying is getting a handle on how much home you can afford. Do your research before you begin house- hunting, so you can be well-informed throughout the process.