Do you want to buy your first home?
There is probably no person in the planet who does not want
to have his own home. The desire to have a home can be a very strong motivating
force for someone to work really hard and save up enough money.
Is it difficult to buy a home? It will be if you do not have
the means to pay for it. But if you make the necessary preparations, you should
be able to find and buy a home that you like.
Having a real estate broker or a lender should be helpful
especially since you do not know much about purchasing a house. They can help
you take out a mortgage that will help you purchase your very first home.
What is a mortgage
and how does it work?
The reason people take out loans is not everyone has enough
money to pay for a house in one go. By having a loan, anyone will be able to
spread out the payment for the home. Instead of paying for the house right then
and there, you get to pay for it in a span of several years.
It works this way:
When you plan to buy a house, you approach a bank or
mortgage lender and apply for a loan. Based on your qualifications or your
ability to pay off the loan, you will be awarded with a mortgage.
This loan, where 80% is the amount of the home and the rest
is interest, will have to be paid over a set period. Loans can be paid within
30 years. Typically, the lender and the borrower will get to determine how long
the loan has to be paid.
Failure to pay back the mortgage loan can lead to
foreclosure, a procedure where the lender can take away your home.
What are the
different types of mortgages?
Typically, there are 2 types of mortgages: fixed-rate and
adjustable-rate mortgage loans.
Fixed-rate mortgages are those whose mortgage interest rate remains the same throughout the term of the
loan. 30-year fixed rates are among the most common types of mortgages
homebuyers apply for. There are other options like 15-year fixed rates and
convertible mortgages.
This offers homeowners predictability. Since they know how
much they are going to pay, they will be able to prepare for it no matter how
much their financial circumstance changes.
One downside to this kind of mortgage is that it can be more
expensive than adjustable-rate mortgage.
Adjustable-rate (or variable rate) mortgages are mortgages
that adjust depending on the current rate.
This means the mortgage rate can fluctuate depending on how the market
does. It can go up or it can go down.
These mortgages became popular when fixed-rate loans were
hard to qualify for. This is advantageous to certain types of borrowers who may
have a little difficulty qualifying for conventional mortgage.
The downside to this is that you may end up paying more when
the rates increase. And if you are looking for a cheap mortgage loan, this may not be the safest choice for you.
How can you find the
best mortgage loan for you?
The simplest answer to finding a cheap mortgage loan is to work with a really good mortgage broker.
A broker is someone who has the knowledge, skills, and experience in helping
you get a mortgage loan application approved.
Mortgage brokers know a lot of lenders. That means they can
bring you to different lenders who can offer you a good mortgage deal. It’s up
to you, with your broker’s guidance, to choose which among the deals is suited
for you.
Can you get approved
for a cheap mortgage loan?
Of course you can get approved for a cheap mortgage loan. You just have to make sure you are working
with a good mortgage broker.
Aside from that, you have to ensure you meet most, if not
all, of the requirements that lenders impose. You must prove your employment
and your credit score must be favorable.
Don’t worry if you have some problems with any of the
requirements because your mortgage broker will help you smoothen out any
problems.
Once you have done all these, you will be able to buy your
first home.
