6 Things A Home Buyer MUST Know Before Getting A Mortgage
Before you start looking for a house, as a home buyer, you need to understand “The Mortgage”. One of our mortgage guys, Gary Miljour from My City Lender told me over lunch one day, “No one likes a mortgage...” It got me thinking about home buyers. Everyone wants to buy a home but know one likes to talk about “The Mortgage”.
We’ve worked with ton of home buyers and about 3% can explain their mortgage options. That means a large number of home buyers are not only clueless but ignorant about the things they should know before obtaining a mortgage. Here are 6 things you should know before obtaining a mortgage:
1 You SHOULD get preapproved for a mortgage before you go looking for a home.
Preapproval is easy and provides you with peace of mind as well as giving your real estate agent a range for providing you with home options. Preapproval is a no cost and no obligation process that is more than a verbal approval from your lending institution, but is just as good as money in the bank.
2 You MUST know what monthly dollar amount you feel comfortable committing to.
So many times home buyers think of a mortgage like they think of paying rent but it is a very different thing. Home owners have to consider that if something breaks you have to fix it. You have to cut the grass, you have to handle pest control, you have to deal with any and every maintenance issue. Maintenance should be considered when thinking about the what monthly dollar amount you feel comfortable to committing to. Remember, you may be preapproved for a large amount, but can you afford the monthly price tag?
3 You MUST think long-term when choosing a type of mortgage.
If you don’t know how long you will own your home, what direction interest rates are going and if you income is going to change in the future how will you understand what type of mortgage is appropriate for you?
4 You MUST know all your payment options
Did you know you could pay weekly, biweekly ? Did you know you could prepay a certain percentage of you mortgage? Did you know all of these options could cut years off your mortgage and save thousands of dollars in interest? Did you know that not every mortgage allows you to do these things? Make sure you ask the proper questions before making a decision.
5 You MUST ask if your mortgage is both portable and/or assumable.
A portable mortgage is one that the home buyer can carry when they buy their next home so that they can avoid discharge penalties. This is especially helpful if your second home will be more affordable than you first because you will not have to go though the entire mortgage process again.
6 You MUST deal with a Mortgage Expert
We can’t stress the importance of dealing with a professional who specializes in mortgages. Their services can make a difference in cost and effectiveness of the mortgage you obtain. They can make the mortgage process faster saving you time and money and most mortgage experts offer their services for no additional costs or obligation
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