As buying a home is likely the biggest purchase of your life, it’s important that you do the research and get the right type of financing for you. In order to do that, there are a few aspects that you need to consider to get a great mortgage.
When it comes to getting the right mortgage, make sure you do your research. Determine what you can afford and what type of mortgage you want. Do you want to make payments on a monthly basis or more often? Keep in mind, the more often you make a payment, the less interest you are going to pay in the long term. Any payments typically go towards the interest first and any money left will go towards paying down the principle. There are different types of mortgage rates as well such as fixed and variable where the rates can change depending on what the market is doing.
You may think that you have a lot of time when it comes to purchasing a home, but when you find the right piece of real estate, you need to act fast. You may have someone else who is looking as well and might make an offer before you. For this reason, it is a good idea to get a pre-approval when you are house shopping so that you know what you will be able to spend on a home. This is something that your lender can give to your Realtor so that they can keep the search parameters within your budget.
When it comes to buying a home, you aren’t likely to buy the first home you find. Consider the same advice in regards to your mortgage and the lender you deal with. You do not have to get your mortgage through your main bank although they may give you a better deal. Keep in mind that you need to be comfortable with whoever you are borrowing the money to you as you will need to deal with them for many years.
Consider Locking in A Rate
With a mortgage, there are two types of rates. A locked rate is where the interest rate will not change for the term of the mortgage. The other is a variable rate where your rate will change when the prime rate changes. Which you choose is going to depend on your personal tolerance and how you feel about the future of interest rates. Your lender should be able to give you an idea of what they expect but remember they cannot read the future and are making assumptions based on the current trends.
Never be afraid to ask questions about the process and anything you are not sure about. A simple question could end up saving your money if you find something in your paperwork that doesn’t make sense and it turns out that it was missed. You need to be comfortable with whatever you sign as this is a legally binding contract between you and your lender.