Great Mortgage Advice
Mortgages can be an intimidating subject. They can seem like a lot of money in a lump sum. And that scares us: taking out a loan for that huge amount. But there are some things to keep in mind for mortgages to help make wise decisions. Here a few pieces of advice that are gold.
1. Keep the mortgage payments in budget.
It’s a good idea to keep the mortgage payment low enough that you can pay it using one paycheck. This helps you gain more perspective about what you can and cannot afford. If the amount is above a paycheck (especially significantly), perhaps this is too much to bite off.
2. Shop around for a lender.
Getting a good interest rate is paramount in the long haul of having a mortgage. So don’t settle for what’s easy on this one. Shop around. Sometimes, we think going to more lenders to get a quote and having them all pull our credit scores will result in our scores dropping. This isn’t necessarily true. If multiple lenders pull your score within a period of time, it’s lumped together as one pull. So do a little digging and then shop for the best rate.
This can also help if you fill out a couple applications with different lenders at the same time. It allows the competitive nature to drive down those interest rates and the lenders to give you a better deal.
3. Be wary of ARM
An adjustable rate mortgage or ARM may sound appealing as it can lower your interest rate at first. But even if you plan to only be in a house a few years and think you’ll be out by the time that interest rate jumps, just be wary. Life may lead you in another direction and you may find yourself needing to stay put longer.
4. Pay more to the mortgage whenever possible
This is tried and true advice. If you have extra cash one month, put it strait to the mortgage before you’re tempted to spend it on a weekend splurge trip or a new item for the house that you may not necessarily need. It’s not glamorous, but paying more when you’re able will only help to drive down the interest rate. Not to mention, you’ll be able to pay it off quicker!
Try to keep these pieces of advice in mind if you’re about to shop around for a mortgage! It may end up saving you time, money and energy!