5 Things You
Must Know About Mortgages!
have changed significantly over the last few years, making your options quite
different than before. Changes in the way you approach mortgage shopping, and
even small differences in the way you structure your mortgage, can cost you
thousands of dollars and years of expense.
If you are about to
buy your first home, or are planning to make a move to your next home, it is
critical that you inform yourself about the factors involved.
Before you commit your
money to monthly mortgage payments, consider these 5 issues. Consideration of
these important things can make your payments work for you.
1. Get Pre-Approved Before You Go Looking For a Home
necessary, and can give you complete peace of mind when shopping for a home.
Your lending institution can provide you with written pre-approval, at no cost
and no obligation. A written pre-approval is as good as money in the bank. It
includes a completed credit application, and an assurance that guarantees you a
mortgage to the specified amount when you find the home you’re looking for.
2. Decide How Much You Are Comfortable Spending Each Month
When you discuss
mortgage pre-approval with your lending institution, find out what level you qualify
for, but also prepare yourself for what monthly dollar amount you feel
comfortable with. You may be approved for more than what you are comfortable
with, so work with your lending institution to determine what your comfortable
monthly amount is, and what value of home this translates into.
3. Know What Pre-Payment Options Are Available To You
More frequent payments
can literally take years off your mortgage. Making payments more frequently, will
significantly lessen the amount of interest that you will be charged over the
long term, thus reducing your payment term.
You can also increase
in the amount you pay monthly, which will have a major impact on the number of
years you will have to pay and again will shorten your payment term.
These two payment
options can cut years off your mortgage, and save you thousands of dollars in
interest. However, not every mortgage has these prepayment privileges built in,
so make sure you ask the proper questions.
4. Is Your Mortgage Assumable
An assumable mortgage
is one that the buyer can take over when you move to your next home. This can
be a very powerful tool at the negotiating table making it much easier and more
desirable for a buyer to buy.
5. Deal With a Mortgage
Consider dealing only with
professionals who specialize in mortgages. Enlisting their services can make a
significant difference in the cost and effectiveness of the mortgage you