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Choose The Right Mortgage For You

If you’re in a financially uncertain situation and are in the need for a mortgage loan, make sure to keep doing extensive research on loan places and your finances before you decide which mortgage is best for you.

Whether you’re a young couple still in school, or like me, a single mother, it’s important to keep finances in check and alway have a surplus of income as a cushion for incidental expenses, debt payments, and emergencies.

Choose The Right Mortgage For You

Here are some quick tips to keeping your finances healthy while pursuing the right mortgage at the right time:

1. Take stock of your finances and course correct

Where are you spending a lot, and where can you reduce it?

Figure out where to cut, where to save, and practice only spending on things that are absolute essentials.

If you have debts it’s best that you find a way to pay them off expediently before taking on another loan like a mortgage.

Keep payment times a top priority for you moving forward so that you don’t jeopardize your future ability to gain access to low interest home loans.

How much can you afford monthly after your necessary expenditures?

You don’t want your current debts or any monthly installments to exceed half of your income.

Remember that a mortgage is a 6 figure purchase, so it’s a large purchase that you don’t want to pay off for too long.

You also want to leave room in your budget for living your life.

Use a calculator to see how much house you can afford with your current income and debts.

2. Choose the right kind of mortgage

There’s different kinds of mortgage plans, such as VA loans for veterans, USDA loans for those who live in suburban or rural areas, Reverse mortgages for seniors, FHA loans for those with a lower credit score, and jumbo loans for those who are buying a home more expensive than the standard loan.

Choose The Right Mortgage For You

There are more conventional loans that borrowers tend to opt for, but make sure to do your research.

Shop around, there are so many options out there, think of it as bargain hunting!

3. Know your mortgage interest rates

Another key deciding factor that you should consider is interest rates.

You have the options to either have a fixed rate mortgage or an adjustable-rate mortgage.

This is where you really want to ask yourself what your intentions are when it comes to buying a home.

Are you looking to pay it off in 5 years and find another home, are you looking to keep this property long-term?

If you know for certain that you might upgrade your home, then it would make sense to have an ARM (adjustable rate mortgage) loan that changes every year with the market.

However, you want to make certain of this, because if you, lets say, stay in that same house for 6 years and decide you for sure are sticking with the house, a fixed rate mortgage interest might be much higher by then.

Choose wisely!

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