The Grown-Up Guide to Mortgages: Essentials to Know Before Getting Started
Saturday, May 24, 2014, 1:00 PM | Leave Comment
Buying your first home is a big step, and it requires a lot of research and learning throughout the process. If you’ve never dealt with getting your finances in order when buying real estate, you have a lot to learn. Buying your first home might seem like a right of passage into adulthood, but you don’t want to get in over your head.
There is a lot you need to know, so you must to thorough research, educate yourself, and get help from the professionals.
If you don’t know where to start, here are a few topics that you will want to learn more about before you enter into a mortgage so that you know what you are getting into and don’t make any mistakes.
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Types of Mortgage Options
Prior to starting the process of getting a mortgage, the first thing that you will need to know is what the different types of mortgages are. There are many different mortgage products, including conventional mortgages, FHA mortgage, VA home loans, and other programs, each of which are designed to help certain groups of people get a loan. Knowing what all of your mortgage options are will help you to find the best mortgage for your situation.
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Basic Requirements
Before starting the process of applying for a mortgage, you also need to know the basic requirements to qualify. All mortgage lenders follow pretty similar underwriting metrics which rely on a borrower’s credit score, income, down payment, and other factors in order to determine whether or not to approve a loan application. Most lenders make these requirements well known to applicants, which will help to ensure that you can guess whether or not you will be approved.
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Total Costs
You should also be sure you know what the total costs of getting a mortgage will be. Prior to applying for any mortgage, you should ask a lender for a summary of what their costs and fees will be. Almost all banks charge origination fees, closing fees, application fees, and other charges, each of which can cost thousands of dollars. Getting a summary of the fees charged by each bank will allow you to compare the costs and choose the most affordable option.
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Servicing
Before applying for a mortgage, you also need to ensure you understand how it will be serviced. If you are getting a loan from a mortgage broker, you will need to understand what bank will ultimately be buying the loan. You should then research the bank which will own the loan to understand the lender’s reputation for servicing the loan. Banks that have poor reputations with consumers should be avoided.
Getting a mortgage is not to be taken lightly—you really want to know what you are doing. Prior to starting the process of getting a mortgage, there are several essentials that you need to know and understand to ensure you get the best mortgage possible.
There’s a lot of helpful information on the internet, however, if you are really lost, you should consult a financial professional who can give you solid advice about the do’s and don’ts of a mortgage so that you don’t make any costly mistakes.
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This article was written by Dixie Somers, a freelance writer who loves to write about business, finance, women’s interests, and technology. She lives in Arizona with her husband and three beautiful daughters. Dixie got her information for this article from the Edmonton mortgage brokers at Performance Mortgage & Credit Services Ltd.
