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Mortgage
Tips for First Time Buyers
A home is the single most expensive thing most people
will ever purchase. In addition, paying off a home loan
can take as long as forty years and will involve paying
an amount of interest that exceeds the cost of the house
itself. In short, buying a house is not something to be
done without a lot of forethought. With the average American
living in their homes for seven years or less, most mortgages
are probably offered to people who have purchased a home
before. But there are always people who are buying for
the first time, and for them, knowing how the process
works is important.
Here are some useful tips for first-time homebuyers: |
Know how much you can afford to pay.
This includes not only the total price of the house, but
the monthly payments, as well. Do not be fooled by the
monthly amount the lender tells you that you can afford;
that number is usually high enough to be well beyond most
buyers' comfort zones. If the lender suggests that you
can pay as much as $2000 per month but you only feel comfortable
paying $1500 per month, then that is your limit. You should
buy a house that will allow you to pay that amount, and
no more.
Check your credit ahead of time. No one wants to be denied
a home loan because of errors on your credit report. You
can check it for free at annualcreditreport.com. Get a
copy and make sure the information is accurate.
Shop around for a good lender. The interest rates and
terms will vary from lender to lender, so you should seek
out the best terms. Additionally, you should try to find
a lender with whom you feel comfortable. You will be paying
on your mortgage for decades to come, so find a lender
and terms with which you are comfortable.
Be aware of closing costs. The amount of money that a
buyer is expected to bring to closing can be astonishing.
Don't be caught off guard when it come time to close and
the lender asks you to bring a certified check for $15,000
that you do not have. Find out ahead of time exactly how
much it will cost you to close on the loan and have those
funds ready.
Most of these items will seem like common sense, especially
to those who have financed a house before. But anyone
who is buying a home for the first time should be prepared
for the process. By being prepared, the process should
go smoothly. |
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