Things to Know Before Taking a Home Mortgage

You’re thinking about ditching the apartment or condominium life and buying a new home for the first time. You don’t know a lot about home mortgages and you don’t know whom to ask to find the answers to your questions. And the thought of a loan scares you. For a first-time home buyer, these thoughts and concerns are completely normal.  Hearing words like “pre-approved”, “low fix APR”, “adjustable mortgage” can all be scary. Read through our list of things to know before taking a home mortgage.


Get the appropriate loan for you. There are dozens of different types of loans out there and signing for the wrong one could prove to be a crucial mistake further down the road. Plan accordingly to how long you plan to stay in the home. If you plan to stay for less than a year, an adjustable rate might be the right way to go. This means that the interest rate can fluctuate month to month. Ask to see the basement and ceiling rates to know the lowest and highest your rate could be. If you plan to stay for any longer, don’t jump for the low monthly interest rate that shoots up sky high after a year.

You could end up with a loan that is worth more than the actual value of your new a ""property Instead get a fixed monthly rate that is reasonable for your income.

Ask for a list of fees. The monthly interest rate is what most people use to shop around for their best option. But that is not the only thing to look for. There are many fees that are associated with a mortgage and many you can compromise on. Ask the lender for a complete list of fees and compare that list with other lenders to get the complete picture for your monthly cost. Negotiate as much as you can. It never hurts to ask.

Understand the terms of your mortgage completely. There is no shame in asking questions to things you don’t understand and saying no to things you don’t agree with. Make sure you understand what type of mortgage you have (adjustable or fixed) and agree to the percentages. When it comes down to it, make sure the monthly payments are comfortable for your standard of living.

Never sign your name unless you’ve seen the good faith estimate. The good faith estimate will list all the details of the loan. That does not mean that the estimate can change. Rates change daily and lenders can and do change details at signing. Always read through the loan details again before agreeing.

If at any point you feel uncomfortable with your lender or have a feeling that you’re being taken advantage of, walk away. You may have found your dream home, but it won’t stay your dream home if you can’t afford it six months from now. You should feel comfortable signing the loan so you can take it to your real estate agent and find your new home.




Author: nmmin

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