Mortgage 101: Where to Begin
Finding the perfect home and the perfect mortgage for you and your family doesn’t have to be tedious and difficult. Yet, many times, we don’t know where to start. There is so much to know when it comes to home buying, it can quickly become overwhelming. But here are some things you can do that can make the mortgage loan process a little easier.
Credit, Credit, Credit!
We all know how important your credit score is, but it has a vital role in whether or not you can get approved for your dream home. Make sure to know your current credit score. You can check your score for free online, at annualcreditreport.com. If you have a co-borrower, make sure he/she checks as well.
What’s your Budget?
Everyone should have a budget, and if you don’t, that’s a whole other lesson. Budgets are important because you can track where your money goes and have money set aside for emergencies. But most importantly, a budget lets you know what you can afford. Create a budget to see “how much home” you can afford. Here is a fun and simple budget planner that can help!
Don’t Be Afraid to Ask Questions!
Sometimes, we like to think we know everything and we are “afraid” to ask if we don’t understand something. Don’t be that person when it comes to your future home and finances. Ask your mortgage loan officer any questions that come to mind, and clarify any confusion associated with home buying. Also, actually read the fine print (even if you don’t want to). Yes, there is important information in there!
Know the Types of Mortgages.
There are many different types of mortgage loans, but the two most common are a Fixed Rate Loan and an Adjustable Rate Loan. Fixed rate mortgages are the simplest. Your payment will not change over the life of your loan because your interest rate does not change. Adjustable Rate Mortgages typically offer a lower starting interest rate and therefore, a lower monthly payment. Your rate and your payment may increase, though, as time goes on.
Remember to Make It Fun!
Have fun searching for your new home, become friends with your mortgage loan officer, and make memories with your family as you take this big step.