Tag Archives: home mortgage
Advice for First Time Home Buyers Seeking Loans
First time home buyers are faced with a lot of confusion when seeking loans. Their inexperience could lead to them taking several wrong decisions which could become disastrous in the long run. Thus it is necessary to be well-informed on how the home mortgage market operates before entering into it.
Things to consider at the onset are the interest rates. That must be one of the prime deciding factors of the person seeking a home mortgage loan for the first time. After all, it is the rate of interest that will decide the amount of payment to make every month for a long period of time. The homebuyer must take time out and compare the rates of interest of different lenders.
However a low rate of interest is not just the only thing to be considered. Every mortgage has several other fees to be paid, such as appraisal costs, application fees, lawyers fees, closing costs, etc. All these must be found out in advance so that they do not hit hard later.
One more thing to consider is how much mortgage can really be afforded. This would determine how much payment the homebuyer would be making per month. The payments should not go beyond the budget of the borrower. When all these decisions are made, only then should a meeting be scheduled with the lender. The lender would make a careful study of the borrowers credit history and then only decide how much mortgage they would give, and at what terms. This is where the borrower must decide whether the payments could be afforded or not.
Rents must not be taken as a parameter to decide how much loan payments can be afforded per month. Rents are for a short term, while mortgages tend to go on for as much as thirty years. Hence, the borrower must think on a broader perspective. Also, the person will have to pay taxes such as property taxes, which were not involved when living as a renter. Renters get several utilities for free, but the homebuyer would need to pay for them. Examples could be water, gas and electricity bills. With homes bought on mortgages, the resident would also need to conduct repairs and maintenance, which were not the responsibility while renting out a house.
An often neglected part of the mortgage is mortgage insurance. All lenders make it mandatory for borrowers to purchase mortgage insurance in case of any eventuality. If the mortgage is a high-ratio mortgage, then this amount could be very high.
So, the first time homebuyer should not just take the rent to compare with how much payments he/she could afford, but consider all other expenses as well. Only then would he/she not feel the pinch of the mortgage payments month after month.
The lender should also be sympathetic with first time homebuyers. You could find this out in the way they carry the preliminary discussions itself. If they are too highbrow to condescend to first-timers, then you are well off with another lender. Talk to them in detail about the packages they offer, and the features of the loan, so that there are no misunderstandings later. It is wisest to take copies of everything that is related to the loan.
Home Loans, Why To Decide To Purchase A Property
Even when it may not sound easy, purchasing a home may not be as hard as it seems to.
Being a homeowner is a desire that most of people share. Even when we love the possibility of changing, the idea of having a place to call ours sounds good at any moment of our lives. That idea gets stronger as we are growing older. When we want to settle up, and kids start to come, then is when most of people whishes to have had earlier the idea of purchasing a home.
It does not mater when you start thinking about purchasing a property. It will always be a good idea. Having a property will grant you among other benefits, the possibility to obtain cheaper loans for whatever you may need them in the future.
Finding The Right Mortgage
Home mortgages are loans secured over the property that is being purchased. They have longer terms than other kinds of loan have, usually they are set up for 20 or 25 years.
You will find many different options on home mortgages, that you will have to analyze depending on what are you looking for. The most important thing to do is to choose your lender carefully. You have to evaluate all the conditions of that mortgage loan that seems to suit your needs best, remember that you will be obligated to that loan and to its terms for a long period of time.
As many other kinds of loans have, mortgage loans can have either fixed or variable interest rates. Fixed rates will be slightly higher, but you will know exactly how much are you going to pay every month until you have finished with the loan repayment. Variable rates are a good opportunity to readjust your monthly budget, since they usually start at a very low interest rate and then it goes on increasing. With this option your monthly payments will be lower for some time and then you will start paying a higher amount.
You can also get a mortgage loan with both, fixed and variable rates. By doing this you will pay a fixed amount for a certain period and then interest rate will become variable.
Both options have their strong and weak points. Fixed interest will ensure that you will be paying the same even if the interests go higher in the future. This kind of rate is good if you choose a long repayment term. In the other hand, if interests get lower, a variable rate will make you save a lot of money, but you will be expose to the market fluctuations and if interests go higher again your monthly payments will be increased. This option implies less risks if you have chosen a short repayment term, or may be better to consider it later in case you would like to get a home mortgage refinancing.
Home Mortgage Refinancing, Later In Time They May Be A Good Option
If you decide to purchase your property with a home mortgage, you may want to know that there is a possibility of refinancing your loan after you have started with the repayment.
Home mortgage refinancing allows you to lower your monthly payments or choosing a longer repayment period. The way in which home mortgage refinancing loans work is very similar to other debt consolidation loans. You get another loan to cancel you home mortgage after you have started the repayment. Getting a new loan you will be able to set up again your loan rates and terms. The best thing is that you can shop for a better loan that the one you have, since you do not have to get a mortgage refinancing from your actual lender.