The home buying process can be an arduous and intricate time, especially for first-time home buyers. However, there are ways to simplify the mortgage process and guarantee you get the most competitive rate without paying excessive interest fees.
Here is some of our favorite mortgage advice from some renowned financial experts:
Credit Scores and History
Suze Orman, a bestselling author and former CNBC host who has helped more than 13 million people improve their finances, often emphasizes the significance of your credit score when applying for mortgage approval. A higher credit score typically results in better terms and lower rates – saving you thousands of dollars over the course of your loan.
Saving Money for a Down Payment
One of the biggest mistakes first-time home buyers make is not saving enough for their down payment. Most lenders require at least 20%, although some will accept as little as 3%. Unfortunately, having such a small down payment makes you more likely to need private mortgage insurance (PMI) on top of your interest rate – an expense which adds up quickly; so it’s wise to put some extra effort into saving for this purpose.
Avoid Commission-Hungry Brokers
A reliable mortgage broker should charge no more than 1% of the loan amount; any higher fee could indicate that you are being sold a mortgage that isn’t suitable for your situation. Before choosing any broker, do your due diligence and research their background to see if there have been any complaints filed against them.
Finding the Right Mortgage
A mortgage is one of the largest purchases you’ll make in your lifetime, so it’s essential that your strategy fits with your financial objectives. That is why working with a mortgage advisor is so critical; they will review all aspects of your situation and offer helpful guidance on achieving those objectives.
It’s essential to have a lender who understands your financial situation, so that you don’t get stuck with an inappropriate loan. Ideally, select someone with expertise and license in the state where you reside for this purpose.
Finding the Perfect Agent
A real estate agent is essential in helping you locate and purchase your new home. Choose someone with extensive local expertise so they can act as your advocate throughout the home-buying process. Furthermore, they will assist in negotiating a price that works for both you and the seller.
Avoid Buying a House That’s Too Far Away
When searching for your ideal home, don’t get carried away in the excitement. Set realistic expectations and take your time. A trustworthy real estate agent can show you homes within budget that are located in the area where you’re searching.
