First-Time Financing Faux Pas: How to Get Great Terms on Your Mortgage

Written by  //  2016/08/31  //  Home Financing  //  No comments

Because a home purchase will probably be the largest financial investment a couple will make, it’s important that the financial details be handled properly. However, if they begin the buying process unprepared, numerous mistakes can be made when it comes to getting the best interest rates, having high credit scores, and other issues. To ensure you don’t make these mistakes, here are some ways to get great terms on your mortgage.

Interest Rate Expectations

One of the biggest mistakes many first-time homebuyers make is failing to have a good idea of what types of interest rates they should expect. According to the experts at Republic State Mortgage Co, most homeowners refinance to get a lower interest rate. Save yourself that money upfront and find a good rate to start with. In many cases, first time buyers find out they will have higher interest rates than anticipated, since they didn’t do any research, which can greatly impact the type of home they may be able to purchase.

To keep this from happening, buyers should check their credit reports for any errors, as well as be wary of applying for more credit while waiting for their mortgage to be approved. In some cases, applications can be rejected and deals can fall through. However, if all goes well for buyers, interest rates may be as low as three percent for those with excellent credit, making all the financial work well worth the effort.

Consider the Costs of Home Ownership

To ensure you get a home you can afford over the long run, make sure you consider the entire cost of owning a home. For example, make sure you include the costs of insurance and property taxes, as well as repair costs and utility bills. If you don’t, you might take on more debt than you can handle, which could lead to additional financial problems in the future.

Don’t Quit Your Day Job

If you or your partner has considered quitting a job or changing jobs, don’t do it while you’re in the process of getting a mortgage. If you do, the lender may think you won’t be able to make the payments and deny the mortgage application. Rather than let this happen, show your lender you have a stable history of employment and wait until you’ve been approved before deciding to make a career move.

By making sure you don’t let what appears to be a minor incident keep you from getting the money needed for your dream home, put some serious thought into these and other matters. If you do, chances are you’ll not only get a great deal from your lender, but you’ll also get the home you’ve always wanted.

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