We’ve all heard of the word home mortgage loan at least once in our life, either when we heard our parents complaining about the monthly interest they had to pay for their mortgage or when we went to the bank. But, if you are a Gen Z or even a young Millenial, then you most likely don’t know what a home mortgage loan is or if you even qualify for one.
Don’t worry because I was in your shoes once, and I was a mortgage novice too. Continue reading this article and learn more about home mortgages loans because our schooling system sure doesn’t teach us things that would help us further down in life.
1. You are more likely to have a mortgage if you have a high credit score
This is why your parents will nag and keep on telling/talking to you about having a positive credit score and always pay it on time. Having a bad credit score might not seem that big of a deal in the short run, but it will cause more inconvenience than necessary in the long run.
You should be aware that since the 2007 mortgage crisis, lenders have been more cautious while lending money, and this is where your credit score comes in; lenders are more likely to lend money to someone with a good credit score instead of someone with a bad credit score.
You should also be aware that if you have a low credit score, you might have higher interests to pay, which will mean that you will pay more for your mortgage in the long run. You are not going to get a home mortgage loan if your credit score is less than 620.
A high credit score means that you can secure yourself a low-interest mortgage. So before getting a mortgage, clean up any issues you have with the bank and make sure you get an error-free copy of your credit report. How can you boost your credit score?
One easy way is to pay your outstanding debts; this includes your personal loans and credit card balances, and make sure to make your payments on time. You can also ask companies if they have “Pay-for-Delete” services; that is, they are willing to write off your records as you pay the outstanding balance in full.
2. Your mortgage payment should fit your budget
Most of us have a dream home in our mind, and we have some pretty wild things we want to have in them like a secret library, an indoor pool or even a lavish garden.
However, this might not be in your budget, and this is why you need to be realistic when you are getting a mortgage for a new home. You need to think about what are necessities and what are things that are only there to satisfy your fantasy.
So, before you start looking at houses and apartments, you need to have a realistic idea of what you can really afford and what is out of your budget. As a general rule of thumb that you should always live by, you should never, or you are advised to never spend more than 43% of your income on debts.
You can either use an expert to help you with this or run the numbers through a calculator if you are good with numbers and start looking at homes that are within your budget.
3. Do your research
There are many programs out there that help you save money on your mortgage, and this depends on the state you live in. Some local governments and even states have programs to help you with your mortgage. Many states offer first-time buyers with a lot of rewards and programs to encourage them to buy homes within their specific states.
There are other types of mortgage programs out there; if you are buying a fixer-upper, then you can apply for the FHA 203(k) loan, and if you are looking to buy a more sustainable or greenhouse, then you might want to look into the Energy Efficient Mortgage program. If you are a current service member, a veteran, Reserve to even a member of the Guard, then you might be eligible for a VA (Veterans Administration) loan; this can help you save money with no or low down payment options.
If you are willing to buy a home in a rural area, then you might want to look into the U.S Department of Agriculture loan. As you can see, there are many options for you out there, and you just have to look into the matter and do your due diligence to get more information on your specific state and the programs they have for home mortgage loans. So, don’t rush into it and take your time to research the programs your specific state offers, which will save you money in the long run.
Find out what kind of home mortgage loan best fits your need, and getting help to find what you need can be pretty tricky. This is why we would advise people to get help when it comes to this. For all your mortgage support and needs, contact Sunland Capital Mortgage Corporation. Located in Florida and with over 2 decades of experience in mortgage counselling, they are leading expert loans and will advise you on the best option and lowest rates you can get on these. So what are you waiting for? Make your dreams become a reality with the help of Sunland Capital Mortgage Corporation.