6 Things You Must Know Before You Buy a Home
Essential Tips to Secure the Best Mortgage and Save Thousands on Your Home Purchase

Mortgage Regulations Have Changed

In recent years, mortgage regulations have evolved, providing homebuyers with more options than ever before. Small changes in how you approach mortgage shopping and structuring can significantly impact your finances, potentially saving or costing you thousands of dollars and years of expense.

Get the Right Information

Whether you’re buying your first home or moving to your next, it’s crucial to educate yourself on the factors involved. Research shows that there are six common mistakes most homebuyers make when shopping for a mortgage. Addressing these issues correctly can result in a more cost-effective and shorter mortgage term.

6 Things You Must Know Before Obtaining a Mortgage

Before committing to monthly mortgage payments, consider these six important factors. Properly addressing these areas can make your payments work harder for you.

1. Get Preapproved for a Mortgage

Preapproval is an essential first step in the home-buying process. It’s straightforward and can provide peace of mind when shopping for your home. A written preapproval from your local lending institution, obtained at no cost and with no obligation, is as good as money in the bank. This preapproval includes a completed credit application and a certificate guaranteeing you a mortgage up to a specified level when you find your desired home.

2. Know Your Comfortable Monthly Payment

When discussing mortgage pre-approval with your lender, determine the level you qualify for and assess the monthly payment amount you’re comfortable committing to. Your preapproval amount might be higher or lower than what you want to pay each month. Work with your lender to establish a comfortable monthly payment and the corresponding home value at current rates, ensuring you don’t waste time looking at homes outside your price range.

3. Consider Your Long-Term Goals

Before committing to a mortgage type, consider your long-term goals and expected financial situation. Ask yourself questions like: How long do I plan to own this home? What direction are interest rates heading, and how quickly? Is my income expected to change in the near term? The answers will help you determine the most suitable mortgage type for your needs.

4. Understand Prepayment Privileges and Payment Frequency Options

More frequent payments, such as weekly or biweekly, can significantly reduce the interest charged over the term of your mortgage, shaving years off your payment period. Authorized prepayment of a certain percentage of your mortgage or increasing your monthly payment can also shorten your term and save thousands in interest. Ensure your mortgage includes these prepayment privileges by asking the right questions.

5. Check if Your Mortgage is Portable and/or Assumable

A portable mortgage allows you to carry your mortgage to your next home, avoiding discharge penalties. This means you won’t need to undergo the entire mortgage process again unless moving to a much more expensive home. An assumable mortgage lets the buyer of your home take over your mortgage, making your home more attractive to buyers and saving you from discharge penalties.

6. Consider a Mortgage Expert

Working with a professional who specializes in mortgages can significantly impact the cost and efficiency of your mortgage. Mortgage experts can expedite the process, avoiding costly delays. Typically, their services come at no cost or obligation, making it a wise choice to consult them for guidance.

By understanding these six crucial factors, you can make more informed decisions and secure a mortgage that best suits your financial situation and long-term goals. Happy homebuying!

Bottom Line

Buying a home is a significant financial commitment, and navigating the mortgage process can be complex. By getting preapproved, knowing your comfortable monthly payment, considering your long-term goals, understanding prepayment privileges, ensuring your mortgage is portable and assumable, and consulting a mortgage expert, you can make more informed decisions. These steps will help you secure a mortgage that aligns with your financial situation and long-term plans, ultimately saving you money and time. Remember, the right information and preparation can turn your homebuying experience into a rewarding journey.