Newlywed Mortgage Tips
To begin off, be aware of interest rates! You need to locate the lowest rate you can find (this should be a no-brainer). Also, ensure you get a fixed interest rate. Variable rates are risky because they have the ability to go up after the opening rate runs out.
Be attentive of what you can pay for. There’s no need to injured yourself money-wise right off the bat. Keep in mind that you do not want your mortgage to exceed 20% of your income after taxes.
If you are a veteran of the military your say could have a program that offers competitive rates. In addition to being qualified for a VA loan, which doesn’t require a down payment, mortgage programs for veterans usually offer much lower rates than banks. The ideal thing to do is to find out if your state has a veteran’s mortgage program.
It would probably be a good idea for you to rent in the beginning. A lot can happen in the initial years of marriage while you and your spouse are deciding where you want to live and what kind of home you want to buy. Another great benefit of waiting is it permits you to set aside some money which you can later use on the down payment.
Including a down payment when attaining a mortgage can eliminate that annoying home owner’s insurance expenditure. Home owner’s insurance (not to be confused with home insurance) is a payment the banks charge when a client cannot pay for a down payment. The monthly home owner’s insurance sum is affiliated with the monthly mortgage payment (note they are separate articles) and typically is extended over ten years. This independent principal protects the bank in case the home ever gets foreclosed.
Yet another advantage to waiting is it gives you time to boost your credit score, which will get you a better rate. To boost your credit score, get one credit card for each of you with a low limit and low interest rate, and make a payment on it every month on time. These timely payments will be reported to the credit bureaus and will cast you in a good light with them.
Another important thing to keep in mind is obtaining a 15 year mortgage in lieu of a 30 year mortgage. Then, make payments every two weeks instead of every month. Doing this will grant you to make 13 payments per year instead of 12, and you’ll pay off that 15 year mortgage in around 11 years! You will also be creating precious equity in your home.
Most banks will be glad to help you with this. In fact, most banks have programs which will automatically take the money from your account bi-weekly (I have mine set for paydays). This is great because you do not have to be bothered with writing a check and lose sleep if your payment will make it on time. Just make sure the money is there!
Buying a house for the first time can seem intimidating, but being patient and getting all your ducks in a row will serve you well in the long term. Remember, above all else, to be patient when financing a home. There’s a lot to take into account and rushing into things won’t serve you in the long run.
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