Home Mortgage
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Home Mortgage Basics
First off let me say congratulations on your decision to start looking into buying a home! Securing an affordable home mortgage is an art and the purpose of this blog is to empower you in the home loan hunt.
Whether you’re looking for home mortgages, home refinance loans, low home equity loans, home equity lines of credit, second time mortgages, debt consolidation loans or even poor credit home equity loans I will teach you how perform careful analysis and make educated decisions.
So to kick things off here are the first 5 things every homebuyer should know:
1. What can you afford? Really.
Time to get serious. Take a good look at your spending habits and monthly income to help determine what home loan size best fits you. Henry Savage, the president of PMC Mortgage Corporation, suggests “traditional qualifying guidelines call for a total house payment not to exceed 28 percent of gross monthly income”.
2. How does my credit affect my home loan search?
Along with your monthly income your credit report is the most important element in securing a home loan. As I explain in my article on Why Credit Matters banks are willing to give a bigger home loan and lower rate to people with good credit history. Know your credit score before cracking the home loan market.
3. What are the pitfalls of achieving a home loan?
The risks of getting a home loan are simple yet scary: the bank can possess your house if you can’t make your home loan payment! For this reason careful financial planning should never be neglected.
4. Do your research!
Know your rights as a borrower. Know your budget. Know you credit report. Know who is competing for your business. Know what their rates are. Knowledge is power in the home loan hunt so diligently do your research.
5. Make home loan officers compete for you.
Remember, you are the customer! A home loan is a product and banks should be competing with each other to earn your business. Call the shots and make home loan officers fight for you!
The first question to ask yourself in your search for a home loan is “What can I afford?”
Continue: What can you afford?