Shopping for a mortgage should be done with the utmost care and foresight – remember, you will be paying it off for quite some time. You need to pick one that best meets your lifestyle.
After having spent months looking, finally finding the right home can be immensely satisfying. But before you celebrate, realize that you’ve only just managed to do half the work. Unless you’ve got cash at the ready, the other half of your house hunting journey is to find the right mortgage loan
Mortgages are made of two components, principal and interest. Principal refers to the original loan amount while interest is the amount charged on a loan by lenders, calculated as a percentage of the mortgage amount. You pay your mortgage in monthly installments based on an amortization schedule determined by your lender.
Pick the right mortgage lender
When you shop for a mortgage, it is crucial that you carefully vet each lender you come across. Some of the better-known lenders may not have the lowest rates or the quickest approval period. You need to consider a few factors, such as: Is the loan officer easy to understand? Did the lender share any useful mortgage tips? How long have they been in the game? Do they have all the necessary licenses? Have there been any complaints filed against them? These are a few of the questions that will prevent issues down the line.
Consider your needs and budget
Purchasing a home can quickly turn into a disaster if you buy beyond your financial reach. A six-figure purchase certainly deserves much more careful thought than, say, shopping for clothes. Determine how much you can afford to budget towards your mortgage every month while still maintaining a fun and stable lifestyle. Take into account having enough money for some savings, vacations, and car payments, among other things.
Keep in mind that lenders will be less likely to approve a large loan amount if you have a lot of outstanding credit card debt as well as other loans.
Choose the best mortgage type for you
There are various kinds of loans available to different types of buyers. Conventional Loans are not backed by any government agencies and are great for borrowers with strong credit. VA loans are available for qualified military personnel, veterans and their spouses. USDA loans are for those who plan to buy in a USDA-designated rural area. FHA loans are for buyers with low credit scores. Finally, jumbo loans are for those planning to purchase a property that’s more expensive than what standard loan guidelines allow.
Consider how long you are willing to pay for the loan
Some people do take out 30-year loans. Owing money for such a long period can be daunting for prospective home buyers; thankfully, 10- and 15-year loan terms are also available. If you are able to shell out bigger payments for a shorter loan period, you are likely to get a better mortgage rate and a reduction in the interest rates.
Unsure about the next steps in your house-hunting journey? Hiring a realtor in New Orleans, LA can help clear up those uncertainties! Drop our team at Axis Realty Group a message and will get in touch with you right away. Reach us by sending an email to Nicole(dotted)AxisRealty(at)Gmail(dotted)com or calling 504.336.3000.
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