The temptation to race into the home buying process is stronger than ever this year. And why not? Mortgage and interest rates are at an all-time low and asking prices are somewhat cheaper. However, even with such perks in the real estate market, people could still make costly mistakes.
“With great rates comes great responsibility.” Okay, so maybe that’s another quote but when costs are too good to be true, it’s better to play it safe. Buying a home is a popular endeavor right now. Lenders and applicants are more apt to fill out forms incorrectly due to the rush and demand. Real estate agents are inundated with the happy go lucky consumers who just receiving their $8,000 tax credits from the government. Scammers or greedy lenders are waiting to take advantage of ignorant first-time homebuyers so be responsible and take the process seriously.
Leave the renter mentality behind. Buyers need to realize that buying a home
will lock them in a huge financial obligation. You could not
only have to pay the mortgage but also high-interest rates and other hidden fees
because you did not read the fine print. The new homeowner must now fix,
renovate, and control his or her own domain—no more landlord to turn to.
Think about saving money whenever possible. Owning a home does not have to be scary. Smart homebuyers can save a substantial amount of money on their mortgage and other home-owning responsibilities if they follow some common-sense rules.
GOVERNMENT BACKED MORTGAGE PROGRAMS
The most obvious way to save on mortgage payments is to choose the loans with the lowest rates in the first place. In today’s economy, more people are turning to the numerous benefits of government-backed loans. For example, VA and USDA loans require no down payment, no private mortgage insurance, and low-interest rates. VA loans are for veterans, and USDA loans are only for those looking to move to rural areas.
However, the FHA loan program is open to anyone. It does require a down
payment, but the requirement is way less than a conventional loan. The FHA
program is not for everyone, so do the necessary research to find out what’s best for you.
Another great feature of these loans is that the government enforces rules on lenders. These rules protect the buyer from hidden fees and bad houses. In any case, a buyer wants to make sure he or she is working with a lender who can be trusted.
A LITTLE EXTRA
How much will the monthly mortgage be? This is good to know before
purchasing. Now ask, can I spare an extra $100 a month? A mortgage should
not bear down and immobilize a family. Buy what is affordable for you, then put out an extra $100 per month towards the interest on the house. By doing so, a family can shave five or more years off of their mortgage. Be sure to put the $100 in a separate envelope with instructions for it to be applied only to the interest.
CREDIT REPORT
Take time to fix credit mistakes. A potential buyer cannot afford dings on their
credit score. So, if one has past errors, take the next few years to work back up to an admirable score. Why? Because no matter what year and how good it is for the real estate market, people with better credit will be able to get a better deal than the next person with lower scores. That’s if he or she does not make any mistakes during the process, of course.
Fixing credit errors, spending a little extra each month, and going with the best loan options possible will save families a ton on their mortgage payments. The trick is to go slow and be responsible in the overall process. Read the fine print and work only with the most trustable lenders.
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