Getting A Mortgage - The Importance Of Research

Any real estate expert will tell you to put considerable thought and research into buying a house

, but the concept of actually getting a mortgage seems to go under the radar. Make no mistake about it, this is an aspect of buying a house you don't want to rush into. Borrow from the wrong lender and you could pay much more for your house than you would have otherwise. Go into the process without making sure your credit report is shored up and you might not get a loan at all. Do your research beforehand and you'll find it much easier to buy a house on favorable terms. Here are some of the points you need to consider.

Your Credit

Banks, naturally, love to loan money to people with good credit. Unlike buying a car or getting a credit card, they are a bit more lenient when it comes to credit blemishes. This is because a house generally appreciates in value over time, thus becoming a powerful piece of collateral in and of itself. Therefore, there is less risk on the part of the bank. Even so, you'll find it difficult to get a good mortgage without good credit. Know your credit score and make sure your credit reports accurately reflect your history.

Know What You Can Afford

It's tempting to get a loan bigger than your means to pay it back. Some people do this in the hopes that they will make more money down the road and be able to more easily fit their payments into their new income. This can turn into a huge mistake. You're just as apt to run into unforeseen problems down the line and wish you had a mortgage that you could pay with your savings. Stay within your means, if not well below them.

The First House

First time homebuyers need to spend more time researching their options than those who have been around the block a few times. There are some special loans available for those buying their first house and they are worth looking into. Some of them can save you a considerable amount of money. Look into your options for a first time homebuyer mortgage and you may be surprised at what you're able to get.

The Down Payment

While financial experts advise you try to put down 20% of the total price of the home when you buy, this simply isn't feasible for a lot of homebuyers. If this is your situation, rest assured that you can find a mortgage that requires no such thing. Some may even allow you to skip the down payment altogether. Know your options before you start house hunting.

by: Alfred Ardis

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