As a real estate agent, I have had the pleasure of helping a very diverse clientele. As such, putting myself in another’s shoes has become second nature, so I can best accommodate a client’s needs. By working so closely with my clients, and learning about how they approach real estate, it is evident that many people might have made uninformed and costly decisions, were it not for my assistance. Because I commit my life to real estate, I have made it my goal to conduct extensive research and relay to you the most important information necessary to make your next real estate experience as successful and profitable as possible.
If you are planning on buying a home, whether it is your first home or you are a seasoned buyer, I strongly suggest that you educate yourself about the buying process as much as possible. A cornerstone of this education should be the special industry insider’s report titled, “You Must Understand 6 Important Issues Prior to Buying”, found below.
In this report, I highlight 6 important issues, related largely to financing your home and making the recent changes to mortgage regulations work for you. Discover what you need to know to get the best mortgage for your home purchase.
YOU MUST UNDERSTAND 6 IMPORTANT ISSUES PRIOR TO BUYING
New Mortgage Regulations Have Been Implemented
Over the last few years, significant changes have been made to mortgage regulations. These changes have increased your options as a home buyer. Importantly, even small changes in both the manner in which you shop for a mortgage and the way in which the mortgage you choose is structured can actually cost, or save, you thousands of dollars & years of payments.
Make Sure You Have the Right Information
Regardless of whether you are planning to purchase your first home, or are a seasoned home buyer, it is crucial that you are informed about the many factors involved in buying a home.
Research conducted in the industry has revealed that there are 6 mistakes that homebuyers typically make when shopping for a mortgage. These mistakes can have an unfortunate impact on the outcome of purchasing a home. However, if these common mistakes are avoided and the issues at hand handled correctly, then you could acquire a mortgage that can be paid more quickly and ultimately cost less.
6 Key Points to Understand Before Acquiring A Mortgage
Prior to committing to a mortgage, you must consider these 6 important concerns. By understanding these 6 points and heeding the advice provided, you can make sure that you are getting the most out of your monthly mortgage payments.
- It is possible, and strongly recommended, to get preapproved for a mortgage prior to house shopping.Acquiring a mortgage preapproval prior to house shopping does a great deal to reduce your stress. Instead of wondering how much you can afford, with preapproval you will understand your budgetary restrictions perfectly. Furthermore, preapproval is simple to obtain. At no cost, your lending institution can provide you with a written preapproval. This preapproval will come with no obligation and can even be obtained over the telephone. Importantly, a written preapproval is akin to having that much spending power. Being preapproved indicates that you have completed a credit application and have been provided a certificate that guarantees you will receive a mortgage for the amount indicated on the preapproval. Thus, you won’t find a home you love, only to find you cannot afford it.
- Understand, and be honest about, how large or small of a monthly payment you are comfortable committing to.In addition to finding out what size mortgage you qualify for, it is equally important to determine for yourself what monthly payment is most comfortable for you. Your financial standing might lead to a preapproval amount which may be smaller, or even larger, than the amount you are most comfortable with. It is important to work with your lending institution to determine a monthly mortgage payment that suits you best. Once you have determined this amount and discovered what value of home the amount translates to in today’s market, you can clearly define and understand the price range of homes which will best meet your needs.
- Determine the mortgage that will best suit your needs by considering both your long term goals and also your expected situation.Before committing yourself to a certain kind of mortgage, you must first ask yourself a few important questions. For how many years do you plan on owning this home? How quickly are interest rates changing and are they becoming more or less expensive? Will your income increase or decrease, affecting your ability to maintain a certain monthly payment? How you respond to these and other equally important and related questions will shape your decision about which type of mortgage suits you best.
- It is important to fully understand the available prepayment privileges and payment frequency options.The more frequently you make mortgage payments, the quicker you can pay off your mortgage. In fact, you can pay off your mortgage years earlier. Specifically, structuring your mortgage payment so that your monthly payment is paid in smaller weekly or biweekly amounts can significantly reduce the amount of interest you pay over the term.
In the same vein, an authorized prepayment of a given percentage of your mortgage, or increasing the amount of your monthly payment, will significantly impact your mortgage term and could substantially reduce the number of years it will take to pay off your mortgage.
Importantly, the aforementioned payment options can reduce your mortgage amount and the number of years it takes to pay off your mortgage, which could save you thousands of dollars. However these mortgage options cannot be implemented with every mortgage. It is essential that you enquire about these options from your mortgage lender.
- Enquire as to whether your mortgage, or the mortgage you are considering, is portable and/or assumable.Where available, a mortgage that is “portable” is one that you can take with you when you purchase your next home. The benefit of this kind of mortgage is that you avoid paying discharge penalties. Unless your next home is much more expensive, with a portable mortgage you can avoid going through the whole mortgage process once again.
A mortgage that is “assumable” is one that can be transferred to the buyer of your home. An assumable mortgage makes for a powerful negotiation tool because it makes the purchase of your home much easier and therefore desirable for prospective buyers. Once again, this kind of mortgage also saves you discharge penalties.
- It is strongly recommended that you consider consulting with a mortgage expert.You should consider dealing with a mortgage specialist. By enlisting the service of a mortgage expert, you can significantly impact the cost and effectiveness of the mortgage you acquire. For example, a mortgage specialist can speed along the process, which can avoid any costly delays. Typically, it should be free to ask questions of any mortgage specialist.
In my “real estate bookmarks” section, I have provided a section listing financial institutions you might like to consider contacting to determine who can deliver the most for your lifelong investment: your home. If you have any questions before contacting one or more of the institutions listed, please do not hesitate to contact me.