Getting a mortgage is crucial when you need to buy a home for your family. To make the most of this credit facility, you must avoid some mistakes that can lead you to run into financial headwinds.
Unless you’re a high roller, a mortgage is the largest debt you’ll ever carry, and it’ll probably take you two decades or more to clear. You simply can’t afford to make a mistake at this stage. That means you must make smart decisions if you don’t want it to make it into a harrowing experience.
Luckily, partnering up with a credible mortgage company in Chandler can keep you from ending up in financial limbo. Here are some incredible pointers to let you breeze through the home buying process.
Forget the McMansion
It’s impossible not to fall in love with a sprawling mansion on the hill complete with a white picket fence. Owning such a house can be a great source of pride and joy and can cement your place in society. However, you shouldn’t undertake such a feat if your finances aren’t up to the task.
Doing so increases the chances of adding to the growing list of house poor Americans. Financial experts recommend that you don’t commit more than 30 percent of your monthly income to mortgage repayment. Spending more than a third of your paycheck on the house leaves you out of pocket. It’ll hamper your ability to other financial obligations.
In addition to the steep mortgage payments, owning a home carries other expenses. You have utility bills, repair and maintenance, insurance, and property taxes to contend with. If you become cash strapped, you might also end up with a huge credit card bill.
Creating a home buying budget saves you from this slippery slope. Crunching the numbers offers deep insights into potential problems, you’re likely to run into down the road. Rather than tempt fate, you can start with a modest house and upgrade later when your finances allow.
As much as you might be tingling with excitement for qualifying for a mortgage, don’t accept the first offer that comes your way. See, most lenders use pretty much the same playbook when vetting borrowers. As long as your background check pegs you as a trustworthy borrower, any bank would be delighted to have your business.
Use this to your advantage and shop around for the best mortgage rate and the friendliest terms. The interest rates vary wildly between lenders, and you can use that to your advantage. A little negotiation goes a long way when shopping for a home loan.
Approach at least three lenders and review the offers they send your way. Examine each offer and settle on the one that suits your current needs and financial situation. Some of the factors to consider includes the interest rate, loan duration, and whether the bank penalizes overpayments and early payoffs.
It best that you don’t romanticize the home buying process. You will have better results if you approach it from a logical perspective. Doubling on research and creating a home buying budget lets you breeze through the mortgage application process. You get to secure a home loan that suits your financial circumstances and carries super friendly terms.