Thinking about purchasing your first house can be both thrilling and intimidating. From getting prequalified to finding a home and signing the paperwork, there are many steps involved – but they can be made less daunting with some guidance from an experienced mortgage advisor.
Your first mortgage should cater to your current financial situation and future goals for homeownership. Fortunately, there are numerous options available – and your loan officer can assist in selecting the most suitable option for you.
When selecting a mortgage, your choice depends on several factors including your budget, credit history and other financial assets. With conventional financing you might be able to finance all of the purchase price for your new home; alternatively you may need a loan with higher interest rate and larger down payment.
If your credit score is low, you might want to consider improving it before applying for your first mortgage. Doing so will make it simpler for lenders to approve you and guarantee a more favorable interest rate – saving you money in the long run!
Be mindful not to overpay for a down payment, as this could put you at risk of having to pay extra in the future when refinancing your home. Generally, saving at least 20% of the purchase price can help get you an advantageous interest rate and also boost the equity you begin with when selling your house in the future.
Don’t get misled into an ARM or other high-interest loan: These types of loans don’t save you money in the long run and can be extremely stressful to pay off. Plus, they require extra payments when interest rates rise – which could prove problematic for many first-time home buyers.
A Preapproval Can Help You Find Your Ideal Home:
A mortgage preapproval gives you a realistic idea of what you can afford and indicates to sellers that you’re serious about making an offer. Additionally, it gives you an edge over other buyers in your area by helping you move faster once you find the home of your dreams.
Always work with a reliable mortgage professional who is invested in helping you reach your homeownership objectives. They’ll guide you through the mortgage process and ensure that your home-buying experience is an enjoyable one!
Millennial Homebuyer Trends:
As baby boomers retire and transition into retirement, an increasing number of Millennials are beginning to purchase their own homes. A Bank of America report revealed that 79 percent of Millennials expect to own a home by 2021, up from 62 percent in 2010. This shift can be attributed to life events like marriage or having children; many expect to own their first house before 2021.
Mortgages can make homeownership more accessible for Millennials, since they no longer need to rely on savings for purchase. Furthermore, having a mortgage makes homeownership more realistic by eliminating the stress and frustration of dealing with loan denials or foreclosures.