How To Shop for a Mortgage
Finally, the time has come. The time to buy your first house, and, very probably, get your first mortgage. This is a huge step, one that takes care. To help you make this decision, this article will guide you through some of the basics of the mortgage process.
First of all, you should know that the more money you can put down, the better it will be. This will lower your monthly payment, allow you to avoid mortgage insurance, and you will pay much less interest over the life of your home.
To avoid paying mortgage insurance, you'll ideally put about twenty percent down. If you can't get this, you'll have to pay the extra fee designed to cover the banks for the extra risk they are taking on. It may be unavoidable, but its nice not to pay this if you can.
The biggest key with a mortgage is to make sure you get one you can easily afford. A common rule of thumb is that no more than 35 percent of your take home income should be your mortgage payment. Over extending yourself can have terrible consequences (as this latest mortgage crisis has shown). Be prudent.
After you have sorted out the matter of how much you can afford, you'll need to decide on which type of mortgage you want. The class standby is the 30 year fixed rate mortgage, which means you lock in a fixed interest rate over 30 years of payments. You can also get mortgages with varying rates, and shorter terms. Be sure you research all these options.
This may all seem a little overwhelming at first. The key thing to remember is that if you really can't afford to move in somewhere, don't overextend yourself trying. Just keep on renting. Its OK.
So, I hope this helps you understand the basics of shopping around for a mortgage. This is not something to be taken lightly, and full research is critical. Get the best rates, get something you can afford, and enjoy your new home!
First of all, you should know that the more money you can put down, the better it will be. This will lower your monthly payment, allow you to avoid mortgage insurance, and you will pay much less interest over the life of your home.
To avoid paying mortgage insurance, you'll ideally put about twenty percent down. If you can't get this, you'll have to pay the extra fee designed to cover the banks for the extra risk they are taking on. It may be unavoidable, but its nice not to pay this if you can.
The biggest key with a mortgage is to make sure you get one you can easily afford. A common rule of thumb is that no more than 35 percent of your take home income should be your mortgage payment. Over extending yourself can have terrible consequences (as this latest mortgage crisis has shown). Be prudent.
After you have sorted out the matter of how much you can afford, you'll need to decide on which type of mortgage you want. The class standby is the 30 year fixed rate mortgage, which means you lock in a fixed interest rate over 30 years of payments. You can also get mortgages with varying rates, and shorter terms. Be sure you research all these options.
This may all seem a little overwhelming at first. The key thing to remember is that if you really can't afford to move in somewhere, don't overextend yourself trying. Just keep on renting. Its OK.
So, I hope this helps you understand the basics of shopping around for a mortgage. This is not something to be taken lightly, and full research is critical. Get the best rates, get something you can afford, and enjoy your new home!
About the Author:
David Williams is the owner of the Denver Home Mortgage site, devoted to helping you learn how to get the best mortgage rate in Denver and much more.
posted by Debt Consolidation Loan at
3:33 AM
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