What You Should Know About Your Mortgage Before Closing On Your First Home
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Buying your first home is both exciting and terrifying. There are so many factors that need to be taken into consideration before you close on your first home. Here are some of things that you need to be aware of before you sign off on your mortgage.
Get Your Finances in Order
Make sure that your finances are in order before you apply for a home loan. You don’t want to be surprised by how much it costs to own a home. There are lots of expenses that will need to be factored into the equation that don’t usually exist when you’re renting. Calculate your monthly expenses and create a budget before you decide to move forward with your purchase. Another thing to have is a buffer so that you can afford any unexpected expenses that may come your way.
Use a Reputable Lender
Find a reputable mortgage broker to help you through the process. There will be a lot of paperwork and legal contracts that are involved with obtaining a mortgage. You need someone that you can trust to explain the process to you from start to finish. This will help you to make the most informed decision possible about your home ownership options.
Examine the Fine Print
There may be clauses and other stipulations in the mortgage paperwork. Some people will choose to have a lawyer go over the mortgage documentation before deciding to sign it. Depending on the type of mortgage that you’re getting, this may be a good idea. Be sure to look for any clauses or penalties in regards to early payoffs and additional monthly payments.
Know Your Interest Rate
Your interest rate will dictate how much money you’ll be spending over the life of the loan. There are different types of loans that are available to you. Some loans have adjustable interest rates that will change with the market. Other types of loans are at a fixed rate for the life of the loan. Decide how long you plan on being in the home before you make a decision about whether to get a variable or fixed rate loan.
Don’t be intimidated by the stack of paperwork that you’ll need to sign in order to close on your house. The large majority of the paperwork is to cover any type of event that may occur during the lending process. Know the basics of your loan so that you can make the best decision possible.
