“Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can literally cost or save you thousands of dollars and years of expense.”
Consider These 6 Things Before You Purchase a Home
“How you shop for a new house, even the way you structure your mortgage. These and other choices you make can either save or cost you a huge amount of money and even a lifetime
There are new regulations on Mortgages. Over the past few years mortgage regulations have gone through several changes, allowing for broader options when it comes to how we approach mortgage shopping. However these same changes can also cost us a lot of money if we are not careful on how we structure our
mortgages. The margin for error is narrower compared to earlier years. we have to carefully plan this significant investment, otherwise we could be looking at a lifetime of regret.
Obtain the correct information
Knowing is winning half the battle, so we have to arm ourselves with the correct information before we even start looking for a new home.
A new research by industry insiders highlights 6 of the most common mistakes that homebuyers make. These 6 mistakes can have a huge impact on our negotiation for our new home. If we are aware of these 6 mistakes, we can avoid them and get a mortgage that will cost us less money.
There are 6 things you must consider before you even pull out your checkbook and spend your hard-earned money to pay for a monthly mortgage:
1. Obtain pre-approval for your mortgage prior to shopping for a home.
When you have a pre-approved mortgage, you’ll find that shopping for a new house is easier and less stressful. Most lending institutions will provide you a written pre-approval over the phone at no cost and under no obligation. Carrying a letter of pre-approval can greatly increase the chances with most banks that you’ll get the mortgage you want at the specified level when you spot that dream home of yours. This written pre-approval has a complete credit application and a certificate as well.
2. Determine a monthly amortization that will work with your income.
What most home buyers neglect to do is to work out a solid dollar amount that they can commit to every month. You can determine this amount by talking it over with your lending institution. Spend a great deal of time considering how much you’re willing to pay for a new home and if you can sustain
the monthly amortization for your new home. Your preferred lending company can help you sort out what monthly repayment you can afford and what kind of houses would be suited for your budget.
3. Think of what kind of mortgage would be suited to your needs, and what your situation would be in the long run.
Before you even secure a mortgage, ask yourself a few questions.
• Will my income in the coming years be the same or do I expect it to change?
• How many years will I be living in this house?
• Which way are the interest rates moving and how will this affect my mortgage payments?
The answer to these and other questions will help you choose a mortgage that you can afford.
4. Find out what payment frequency options and prepayment privileges are at your disposal.
If we have frequent payments that are weekly and biweekly, we can remove years of your mortgage. By adjusting our payments so that we can settle our mortgage sooner rather than later, we can reduce the amount of interest we have to pay in the long term.
The pre-payment of a percentage of your mortgage, or deciding to increase your monthly amortization will have a huge effect on the number of years it will take to pay off your mortgage.
Find out if the mortgage you’re planning to get has the option for pre-payment. These payment options can save you a lot of money in terms of interest.
5. You need to know if your mortgage is assumable/ or portable.
An Assumable Mortgage is when a buyer of your home can assume ownership when you move to your new house. This is a potent tool to use during the negotiation process; it makes your house more attractive for a buyer. You can also avoid any discharge penalties.
If it’s available you can make use of a portable mortgage. This is under the condition that you do not choose to live in a more expensive house.
6. Get help from a Mortgage Professional
Enlist the assistance of an expert in mortgage. Often times there is no cost or obligation involved to inquire. Since they specialize in mortgages, they can help speed up the process and avoid any delays. They can determine whether the mortgage you have is best for your needs.