Owning a home has always been an integral part of the American Dream. It is considered to be somewhat of a right in the United States. However, with so many Americans struggling to get by, that dream is becoming less and less attainable.
That is not to say, however, that owning a home is impossible. Far from it. What is needed nowadays is a bit more foresight and preparation. By following a few simple steps, the best home loans are within reach. What should you do, exactly? To better show how to get the best mortgages available, here are three tips on how to go about the mortgage process — and how to continue the good work once you get the home loan:
Spend Only a Quarter of What You Earn on the Mortgage: Ellie Mae, one of the largest processors of mortgage applications in the U.S., found that the most successful homeowners are those who spend approximately 24% of their monthly income on their mortgage. Spending more than a quarter of your earnings on your mortgage increases the risk of falling into debt and, even worse, falling behind on your mortgage payments.
Compare Home Loans: Compare mortgages in order to find the best deal for you. There are a variety of lenders out there. Some lenders offer special deals; others, for various reasons, are willing to put more trust in you than others. A good — nay, phenomenal — mortgage deal is out there. It is just a matter of comparing and contrasting deals. The more mortgage deals you compare, the more likely you will find an offer that is right for you.
Make Sure You Have Enough Money to Spend After You Secure a Loan: Low deposit home loans may be hard to come by. Whether or not you can find one depends a lot on your finances, especially your credit score. A typical down payment for a house is about 3.5% of the mortgage. Assuming you find low deposit home loans to choose from, make sure you have enough money after the down payment. Closing costs, paying for points, and other unforeseen expenses can make or break a promising start to paying a home loan.
For more information about how to successfully acquire a home loan, feel free to leave a comment or question at the bottom.