When it comes to the housing market many individuals are taking advantage of the record low home prices with the knowledge that prices will rebound. While this is a very wise investment many individuals become intimidated when it comes time to secure a mortgage for their new home. Whether you are a first time home buyer or a seasoned real estate investor, playing the mortgage game can be a stressful part of the house buying process. While securing a mortgage is one of the most stressful parts of the process it is really the most essential, because without a mortgage most individuals would not be able to purchase a home.
The first step in any home buying venture is to first do you research. It is important to not only research the many lending options that are available when it comes to securing a mortgage, but to also research your own personal situation. While there are lending institutions that will give most individuals a mortgage, the key is to ensure that you are the best possible candidate for the lowest rate, and this may take some work on your part. The first step in this process is to check your credit, and to fix any errors or inconsistencies that may appear to ensure that you have the highest score possible when you approach your lending institution.
While your credit score is one of the most important aspects to securing a mortgage it is not the only aspect that is reviewed by your financial institution. Once you have your credit at the highest possible level it is time to look at your personal finances and determine exactly the how much of a mortgage payment that you can comfortably afford. If you are looking to trade in your rent for a mortgage payment this can be an easy gauge to use. Simply decide on a mortgage, insurance, and real estate tax payment that is less or equal to your monthly rent. This will ensure that you will be able to pay back your mortgage.
Once all of your finances and credit is in order then you should consider your down payment. In reality you should have been saving for a down payment for at least a year before you approach your financial institution. While it is possible to secure a mortgage without a down payment it is much more difficult and the rules and restrictions are much harsher than if you have a ten to twenty percent down payment.
The mortgage game is really all about planning and ensuring that you get the best rate possible for your specific situation. It is important to remember that your home is the biggest investment that you will ever make and doing your homework has the potential of saving you thousands of dollars over the course of your mortgage. It is also important that you choose a loan that you will be able to comfortably afford for many years into the future, because the average mortgage has duration of at least 15 years. Now that you have all of your information it is time for the fun part, searching for your dream home.
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