Updated: Jun 12
You have found your dream home. Now the only problem is getting funding. A mortgage is a loan from a financial institution that allows homeownership. There are a lot of options for homeownership. The mortgage process can be hard for first time home buyers. Here is everything you need to know about mortgages .
Cost of Homeownership
You should know your finances before you consider a mortgage or even start really looking for houses. A home is typically the biggest asset most homeowners own. There is a lot of associated costs with homeownership. Calculate a potential monthly mortgage payment and add it to your monthly budget.In addition to your mortgage, insurance and taxes, you’ll have home ownership expenses. Unlike life as a renter, a homeowner is expected to pay for all repairs. A home warranty can help offset those expenses with appliance and system repairs and replacements. Debts can add up quickly. You need to be cognizant of your expenses and monthly income.
Credit is important. It is used in job screening, car payments and much more. If you have good credit you can qualify for a lower interest rate. When you apply for a mortgage, you should compare at least 3 quotes. If you apply for those mortgages within 45 days of each other, it will only count against your credit once.
Preapproval can open you up to a higher limit. It also shows you are serious. Just because you’re approved for a certain amount doesn’t mean you must take out a mortgage for that amount. For example, if you’re preapproved for a $450,000 mortgage and find a house for $350,000, you can just request a loan for the sales price minus your down payment.