Getting a mortgage can be a stressful and uncertain process. Taking out a loan for the kind of money needed to buy a home carries with it certain implications and responsibilities. These responsibilities will differ depending on the rates for home mortgages you can afford, the choice between local mortgage lenders, and other factors. With many types of mortgages available to choose from, we’ve created this list for how to go about your experience getting a mortgage, and what you should look for and avoid in the process.
If you have a low credit score, you can still qualify for a mortgage. Many subprime mortgage lenders will accept a higher down payment up front as a means of insuring themselves against uncertain credit. In general, you’ll need to make at least a 3.5% down payment either way. It’s still a good idea to clean up your credit score and fix up any errors to avoid complications later on, as many lenders require a minimum of 680.
If you don’t make a lot of money, there are low deposit home loans and low interest home loans available that can make it possible for you to still get a mortgage. There are even zero down home loans available in some cases.
It is very important to compare home loans and consult a variety of commercial mortgage lenders before committing to a mortgage. If you fail to compare home loans, you run the risk of losing options or falling victim to an exploitative mortgage agreement.
As important as it is to compare home loans, you will also need to have funds set aside to cover closing costs. Avoid major purchases or changes in your employment situation in the months before and immediately after starting your mortgage, to avoid delays in the mortgage process.
Your monthly debt payments should not be more than 36% of your overall income. Choosing a fixed rate mortgage will help you ensure a predictable cost that you can easily track alongside other expenses.
Despite the vagaries of the housing market, getting a mortgage can be simple, straightforward and doable with the right knowledge and preparation. Talk to a mortgage broker or online mortgage lenders to find out what will work for you. Feel free to leave us notes, comments or experiences.