Does anyone have any good mortgage advice for first timers?
Question by oneup38668: Does anyone have any good mortgage advice for first timers?
Best answer:
Answer by buttfor2007
Do not exceed a quarter of your take home pay, after adding in insurance, taxes, utilities, including heating oil, and a budget for the continual repairs.
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Short Term Cash Advice
Hi. Just remember that interest rate is everything. Know how much you can afford – Don’t go in over your head! Don’t get a variable rate, get a fixed. Here check out my webpage for lots of good tips:
http://www.tbm-company.com/mortgage.html
Borrow as little as you have to, and pay it back as soon as you can.
For me, a fixed rate is better than a variable rate.
Those companies are in the business to get as much of your money as they can. Don’t think that they are there only to help you. Work a deal, then hold out for a lower rate. Do not let them presure you into a deal you are not happy with.
Only take a payment that you know you can pay each month on time.
Set the date of payment that is best for you.
Plan on paying more than the payment asks for. A 30 yr mortgage can be paid off in as little as 7 yrs, if you pay it right. Consider half payments twice each month, this will save you money in the long run.
It is best if you can go in there with at least 20% down, so save first and wait a bit if you can work that out.
Watch out for the prepayment penalty. That says that you can not pay more than x amount extra within the term of the penalty. Might be two yrs, might be five yrs. The shorter the term, the better for you.
Get a fixed rate. Don’t fall for the adjustable rate scam that you hear so much about these days. You can get a 30 year right now in the low 6% and a 15 year in the high 5′s if your credit is good. Learn all about what you are getting into and do NOT be afraid to read everything when you sign. If your broker tries to rush this process, be suspicious. Don’t buy more house than you can afford. Understand that once you own a home, things break. Having some cash set aside for repairs will save you some grief. Understand and learn all the mortgage terminology that you can. Escrow, amortization, interest rate etc. Know what your taxes and insurance will be before you enter into the loan. Learn how much interest is at the top of your loan and make sure you can pay extra principal with no penalty. Paying off a mortgage quicker will save you TONS of money.Tons! (Google amortization calculator and play with your numbers, you’ll see what I mean) Hope that helps! Have fun in your new home!