Purchasing a home is one of the biggest financial decisions many will make in their lifetime. Before you begin looking at homes however, you will likely need to first browse the mortgage market. There are many things to consider when looking at prospective mortgages, and choosing one is not a job to be taken lightly. Before shopping for a home, consider these five things to know when buying.
1. Know your budget
Take into account not only the mortgage price but also insurance, taxes, maintenance, utilities, etc. Calculate an affordable monthly payment and then figure out the corresponding home price.
2. Plan for the unexpected
Consider incidentals and accidentals. Unlike renting, when you can call your landlord to fix a broken appliance, you are responsible for anything that needs to be fixed. While you cannot plan for an accident, you should have savings set aside to be ready for the inevitable.
3. Learn the process
Talk to lenders, agents and those who have borrowed before to better understand the way mortgages work. Having someone you know and trust to answer questions can make a world of difference and help the process seem less daunting.
4. Shop around
When choosing a mortgage, do your research and speak to more than one lender. Not everyone will offer you the same price. Make sure you understand the interest rate, fees, terms, and whether it is an adjustable- or fixed-rate mortgage. Ask other clients about the lender’s ability to close on time and how long it takes them to process a loan.
5. Know your lender
Become acquainted with how your lender operates. Whether it is online or paper documentation, familiarize yourself with their process and guarantee that it works for you.
Navigating the mortgage buying process can seem overwhelming and be filled with uncertainty and stress. However, with some research and due diligence you will be well on your way to moving into your new home.