Looking For Your First Home? 3 Tips To Make The Process Go Smoother
If you are planning to buy your first home, there is a lot of work involved. First, you must determine what you can afford and the type of mortgage that you want. You can then hire a realtor to find your dream home. To help you get started, below are three tips so you can get through the process quicker and smoother.
Determine Monthly Payment You Can Afford
The first thing to do before you start shopping for a new home is to determine the amount of money you can afford to pay. You also have to pay taxes and insurance on your home, along with maintenance and repair costs. The last thing you want to do is to get into a home you love and then find that you cannot afford the house payments.
Sit down and write down all your debt and all income you have coming in. Go through the list and see if you are paying for things you could eliminate to free up money to use for your payment.
There are free home mortgage calculators available online for free. You input your information and it will give you an approximate amount of what you can afford.
Choose Between A Fixed Rate or Variable Rate Mortgage
You have the option of choosing between a fixed rate mortgage and a variable mortgage. With a home fixed rate mortgage, the interest rate stays the same for the entire life of your mortgage loan. This can be beneficial as you will always know what your payment will be each month. The main drawback to a fixed rate mortgage is the interest rate is generally higher when compared to variable rate.
With a variable rate your interest rate goes up and down throughout the life of your loan. This is a drawback as your payment may change on a regular basis. The main benefit of this, however, is that because the interest rate changes you may pay a lower interest rate throughout much of your loan when compared to a fixed rate mortgage.
Find a Mortgage Company
When you determine what you can afford and the type of mortgage you want to pay you need to find a mortgage company. There are different types of mortgage companies you can choose from including:
- Mortgage bankers and bank: With a mortgage banker and bank you can have all financial accounts that you have in one place. You will likely not be able to get a government type of mortgage loan through a bank, however, such as VA or FHA loans.
- Mortgage lender: The only service a mortgage lender provides is to provide real estate loans to their customers. The lender will take care of everything from beginning to end for you. This will allow you to get a mortgage loan much faster.
Talk with the mortgage lender you decide on and they can give you much more information.