We shared some great tips for buying a home last month, here we venture into the world of loans. In order to secure the right mortgage for you, there are a few steps that you should take into consideration for the loan process.
First off, you want to be sure that you properly educate yourself on the various loan options. There are several options out there that are available through thousands of banks, finance companies, credit unions and more! We want to be sure that you are getting the best option for you. There are even more sources of information; some more helpful than others. Your real estate agent can help you navigate through all of it.
Be sure that you are realistic about your financial situation. The last thing we want new homeowners to endure is not being able to properly pay their mortgage. The more honest you are with yourself, the less chance this will happen. Explore how much you really think you can handle for your mortgage payments and plan from there. Since this is a long-term investment, you really want to be sure that this payment schedule will be good for years to come. One option that has proven to be helpful is using a loan calculator to forecast the best payment options. One tip can be to outline your monthly living expenses and project other financial commitments that may arise during the life of your mortgage.
You will need to decide what route you’d like to go with your mortgage – there are fixed-rate and adjustable-rate mortgages. It’s important to talk to your lender to be sure you are selecting the best option for you. Fixed-rate mortgages lock you in at a set rate and protect you from the risk of rising interest rates-their stability can make it easier for planning. An adjustable-rate mortgage is commonly based on the U.S. Treasury Index for one-year Treasury Bills, although it may be geared to other indexes. Adjustable rate mortgages can be appropriate when you know you are going to be in the property for a specific time period.
Once you have decided on the type of loan you are interested in, it is time to apply for your mortgage! Because there are so many options to consider, make sure to really spend time evaluating what works for you and ask lots of questions. You may find that having a trusted and knowledgeable Real Estate Professional by your side for advice and perhaps some beneficial connections will give you some peace of mind.
Next month-Your Credit!