Planning Your American Dream: 3 Things To Know About Your First Mortgage

Written by  //  2016/11/04  //  Home Financing  //  No comments

For many families, their dream is to own their own home. While the prospect of owning a house can certainly be exciting, the technical process of purchasing a mortgage can sometimes be intimidating for newcomers. However, don’t let what you don’t know dissuade you. Educate yourself about the process. Below are three things you should know about your first mortgage.

It’s Best to Get Preapproved

If the idea of trying to obtain a mortgage and then failing part way through the process makes you nervous, then you should certainly get preapproved for a mortgage with a bank before you even begin looking at houses. However, it’s a good idea to get preapproved in general. In fact, many real estate agents don’t want to deal with buyers who weren’t already approved by a bank. Going through the preapproval process will also give you important information regarding just how expensive a home you can actually afford. Also be aware that a preapproval and a prequalification sometimes mean different things.

Making a 20 Percent Down Payment Is a Good Idea

It is true that you don’t actually need a 20 percent down payment to obtain a mortgage. While that may make a mortgage sound more attractive to you, paying the 20 percent is still very much worth it. Making that large of a down payment will make the process a lot smoother for you then if you try to pay less. It will also start you off on the right foot with you owning more equity in your home. If you pay considerably less, you’ll have to pay more fees, higher interest rates and larger monthly mortgage payments.

An Online Mortgage Calculator Can Answer Some of Your Questions

There are a lot of choices when it comes to a mortgage. Should you obtain a 15 year mortgage or a 30 year mortgage? Should you get an adjustable rate mortgage or a fixed rate mortgage? You may also be wondering what your monthly mortgage payment is likely to be. Thankfully, you can answer many of these questions by using online mortgage calculators. Different mortgage companies such as Premium Mortgage Corp make these calculators available to potential customers to help them sort out some of the questions they have about what kind of mortgage they should choose and how a certain mortgage type will impact their finances.

Overall, don’t be intimidated by the process. It isn’t as scary once you gain some knowledge. Owning property is a wise investment for nearly any family. If you can afford to do so, certainly begin the process of eventually owning a home.

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