6 Things You Must Know Before Buying a Home

Things You Need To Know Before Buying

"Small changes in the way mortgage purchases are made, and even nuances in the structure of mortgage loans, can literally cost or save thousands of dollars and years of expenses."

Mortgage Regulations Have Changed . . .

Mortgage regulations have changed significantly over the last few years making your options wider than ever. Subtle changes in the way you approach mortgage shopping and even the small differences in the way you structure your mortgage can literally cost or save you thousands of dollars and years of expense.

 

Get the right information

Whether you are about to buy your first home or are planning to move to your next home, it's important that you understand the factors involved.

 

6 Things You Must Know Before Obtaining a Mortgage 

Before putting your hard-earned dollars into your monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments much heavier for you.

 

1. You can and should get a mortgage pre-approval before you start looking for a home

Pre-approval is easy and gives you complete peace of mind when shopping at home. Your local lending institution can give you pre-approval in writing at no cost or obligation. This can be done quite easily over the phone. This is more than the verbal consent of a lending institution, written preliminary consent is just as good as money in a bank. It includes a completed loan application and the certificate that guarantees you a mortgage to a certain level when you find the home you are looking for.

 

2. Find out what monthly dollar amount you feel comfortable

When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for and also pre-evaluate what monthly dollar amount you feel comfortable with. Your situation may give you a pre-approved amount that is higher (or lower) than the amount you would like to withdraw each month. By working with a lending institution to figure out what that monthly amount is and how this translates into the value of your home at today's rates, you won't waste time looking for homes that don't fall within your price range.

 

3. You should think about your long-term goals and situation to determine the type of mortgage that best suits your needs

There are many questions you should ask yourself before deciding on a particular type of mortgage; How long do you think you will own this house? In what direction are interest rates going and how fast? Is your income expected to fluctuate (up or down) any time soon, affecting how much money you can pay to pay off your mortgage? The answers to these and other questions will help you determine the most suitable mortgage you should be looking for.

 

Also Read: 13 Extra Costs To Be Aware of Before Buying A Home

 

4. Make sure you understand what prepayment privileges and payment frequency options are available to you

More frequent repayments (for example, weekly or bi-weekly) can literally shorten your mortgage years. Simply structuring your payments to come out more frequently will greatly reduce the amount of interest that will be charged over the period. For the same reason, an authorized prepayment of a certain percentage of your mortgage or an increase in the amount you pay monthly will have a big impact on the number of years you will have to pay off and can significantly reduce your repayment period. These two payment options can shorten your mortgage years and save you thousands of dollars in interest. However, not every mortgage has built-in prepayment privileges, so ask the right questions.

 

5. Ask if your mortgage is both portable and/or acceptable

A portable mortgage, if available, is one you can take with you when you buy your next home and avoid paying layoff penalties. This means you won't have to go through the entire loan process again, unless you are moving into a much more expensive home. A putative mortgage is one that your homebuyers can take over when you move to your next home. This can be a very powerful tool at the negotiating table, making it a lot easier and more desirable for buyers to buy a home, and also saves any penalty for dismissal.

 

6. You should seriously consider contacting a mortgage expert

Only consider working with a professional who specializes in mortgage loans. Hiring their services can have a significant impact on the cost and effectiveness of your mortgage. For example, they can speed up the process by avoiding costly delays. Usually, there is no cost or obligation to inquire.

 

 

Thinking about BUYING a Home,

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647-494-0009

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Parveen Tiwari

647-494-0009

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