Simple Tips When Getting Your First Mortgage

If you are the type of person who is not looking on renting a home forever, then the solution to your problem is likely getting a home mortgage loan.  For people who are doing it the first time, that task can be both daunting as well as exciting.  In order to be successful in it though there are some simple steps that you need to follow:

mortgage1. Save, save, and save – saving part of your salary is usually not enough for a home loan.  It is important that you manage to save a decent amount of money so you can use it for your downpayment.  The higher the upright payment is, the lower the monthly charges and interest usually gets.  Most usually requires around 10% to 15% downpayment for the total value of the mortgage.  Some people usually take double jobs in order to be able to save money for the downpayment.  Saving 10% of your salary does not really apply when it comes to applying for a mortgage loan and will take you many years before you can come up with a decent amount, this is considering your salary is on the average like most people.

2. Knowledge is Power – when getting a mortgage you don’t just get what has been offered to you.  It is important that you make your own research regarding the different types of mortgage, set-up fees, solicitors’ fees, stamp duty and many more.  Once you are well aware of the different charges they make, you will be able to make a more educated decision regarding which type of mortgage suits your situation best.  If you plan on taking the variable rate-type of mortgage, you need to take into consideration any increase in interest rates which may affect your regular budget.  This makes it necessary to have a buffer in your finances so you can cover any such increase.

mortgage reality3. Be Realistic – all of us have our own dream homes, but not many of us will be able to afford them.  When getting your first home, it is important for you not to get too carried away with concept of your dream home.  At times like getting a mortgage, it is important to be realistic and take only what you can afford to pay without over-stretching your finances.  It is recommended to pay for a small property in a nice area or a large house in a less desirable location than having to pay a huge mortgage.  Gambling on a huge mortgage is simply not recommended.

4. Long-term – a lot of financial experts think that it is ideal to think long-term when getting a mortgage deal, especially when interest rates are low.  The interest rates of mortgages fluctuate every now and then.  Due to this, it is often better to get a fixed rate mortgage that is five to ten years long, particularly if the interest rates are on the down low.  This way, you won’t have any problems budgeting your monthly mortgage payment without the nasty surprises of interest rates rising up badly.

No comments yet.

Leave a Reply