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Buying a house (especially if it’s your first) can be a thrilling experience. And yet, so many buyers dread the process because it often involves taking a loan and having a mortgage on your shoulders for at least a few years.
However, mortgages don’t need to be this pressing burden that strangles your family’s budget. If you do a bit of research and make the right decisions, you can save a lot of money that you can invest in renovations or other home-related activities.
So, if you’re ready to take your first steps on the road of buying a property, here are a few tips to help you out with the mortgage:
1. Do The Research
Most home buyers who know they’ll need a loan to fund their purchase will go straight for a traditional mortgage. If they go through the approval process without hindrance, they’ll be happy with that and forget about doing any additional research.
However, today’s market is incredibly diverse, which is why it’s not uncommon to find a wide range of products with similar core features but slight differences that tell them apart. The same is true in the financial and lending sector, where, with just a bit of research, you can find out there are different types of mortgages for different types of borrowers.
You may be a good fit for several of these financial products. If this is the case, then you’re in luck; you now have the possibility to make a choice by comparing products and finding the one that fits your needs. Overall, research helps you learn more about home loans and how to identify the best offer.
2. Talk to a Specialist
The housing market has gone through several cycles of up and down since the start of the pandemic. And specialists still think it hasn’t yet reached a level of stability. Therefore, interested buyers may feel a bit anxious about making a life-altering decision at the moment.
But is it wise to wait for the current instability to subside? Is there a light at the end of the tunnel? Or should you just adjust to the current market and make your move? All these questions and more are why you should have loanDepot’s team helping you.
You may also want to consider the option of a 1000 a month repayment plan. See the 1000 a month repayment example for details.
When you work with a specialist or a team of specialists, it’s easier to make a decision about a home purchase or a home loan.
3. Find a Low Down Payment Loan
Depending on the type of loan you find for your current situation, the downpayment can be quite a hefty investment. But wouldn’t you rather keep the money and invest in repairs, renovations, or other things around the new house?
While there are loans that also include the cost of renovations (besides the cost of the house), it’s best to limit the amount of debt you take. So start looking for a low down payment loan or a grant. Some homebuyers (usually first-time owners or people who haven’t owned in the last few years) have the chance to qualify for a government grant which allows them to borrow less on the mortgage.
4. Try to Get Rid of PMI
Private Mortgage Insurance (PMI) is there to protect the lender in case you can’t pay the mortgage. This is extremely common for low downpayment loans (usually loans where the down payment is lower than 20%), and it can add hundreds to your monthly payments.
So, if your lender doesn’t want to give it up, try shopping around or looking for alternatives. Also, ask the lender for solutions – you may be surprised by what they keep in the shadows.
Taking out a mortgage is not an easy feat, but if you have to do it, why not make sure you’ve found the best and less-costly one? It takes a bit of digging, but the financial market is diverse enough so anyone can find something that fits their needs.
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