Buying a home is an exciting and sometimes scary step to take. Imagine this scenario: you decide on a
budget, go house hunting, find your perfect home, take one look at the price tag and your heart
sinks—how are you going to afford this? Mortgages can make help make your perfect home much more
affordable and easier to digest. When you’re buying a home, consider these four mortgage tips to make
your process much less stressful.
1. Know what you can afford.
While mortgages can take a large number look much smaller, you
still must be realistic with yourself; is this a payment that you can comfortably make every
month? The rule of thumb is to look for a home that is no more than 2.5 times what you make in
a year, but it’s probably a good idea to give yourself a little more room. The average person puts
down 10% and does a fixed-rate 30-year mortgage, but paying your home off more quickly will
save you thousands of dollars. Consider buying a less expensive home that you can pay off
quickly and avoid unnecessary interest tacked onto your monthly payment.
2. Strengthen your credit.
Your credit score is like a reliable friend’s opinion to your bank; it tells
lenders how trustworthy you are with paying off debts. A strong credit score means that you’ll
have an easier time getting approved for a mortgage and your interest payments will be lower.
If your credit score says that you are not trustworthy, the lender will want more money upfront,
hence the higher interest rate.
3. Know your options.
There is more than one type of mortgage. Most first-time homebuyers go
for the Federal Housing Administration-insured loan—especially those with a lower credit score.
This is because, to get an FHA mortgage, you only need a credit score 580 or higher. Another
option is a conventional loan, which is not insured or guaranteed by the federal government and
involves more risk for the lender, which is why you need a relatively high credit score to be
approved for this type of mortgage. From there, you can choose a fixed-rate or adjustable-rate
mortgage; if you have a sensitive budget, it’s best to stick with a fixed-rate.
4. Don’t wait.
It’s in your best interest to get preapproved for a mortgage before you find your
perfect home. Getting pre-approved will give you a range of what the bank is willing to lend you,
making your search for an affordable home much easier. If you find your dream home and it’s
out of your budget, you and the seller of the home will be left with a lot of disappointment.
Looking to buy a home? Consider Choice Mortgage Bank. We make the process easy and painless so you
can move into your dream home as quickly as possible. Call us today to find out how we can help you
attain a mortgage at 561-441- 2730. We hope to hear from you soon!