How To Get Your First Mortgage
Finally, the time has come. The time to buy your first house, and, very probably, get your first mortgage. This is a huge step, one that takes care. To help you make this decision, this article will guide you through some of the basics of the mortgage process.
First of all, you should know that the more money you can put down, the better it will be. This will lower your monthly payment, allow you to avoid mortgage insurance, and you will pay much less interest over the life of your home.
Mortgage insurance is a fee assessed on your mortgage if you don't have at least twenty percent down. This fee is there to cover the bank for the riskier mortgage. If you don't have enough money down, you'll have to pay this. Not the end of the world, but its nice to avoid.
The biggest key with a mortgage is to make sure you get one you can easily afford. A common rule of thumb is that no more than 35 percent of your take home income should be your mortgage payment. Over extending yourself can have terrible consequences (as this latest mortgage crisis has shown). Be prudent.
After you have sorted out the matter of how much you can afford, you'll need to decide on which type of mortgage you want. The class standby is the 30 year fixed rate mortgage, which means you lock in a fixed interest rate over 30 years of payments. You can also get mortgages with varying rates, and shorter terms. Be sure you research all these options.
If all this seems daunting, remember that there is no harm in renting until you can afford the mortgage you really want. Over extending yourself is always a bad idea.
So, I hope this helps you understand the basics of shopping around for a mortgage. This is not something to be taken lightly, and you should certainly do your research to be sure that you get the best options you can. Good luck in your house hunting!
First of all, you should know that the more money you can put down, the better it will be. This will lower your monthly payment, allow you to avoid mortgage insurance, and you will pay much less interest over the life of your home.
Mortgage insurance is a fee assessed on your mortgage if you don't have at least twenty percent down. This fee is there to cover the bank for the riskier mortgage. If you don't have enough money down, you'll have to pay this. Not the end of the world, but its nice to avoid.
The biggest key with a mortgage is to make sure you get one you can easily afford. A common rule of thumb is that no more than 35 percent of your take home income should be your mortgage payment. Over extending yourself can have terrible consequences (as this latest mortgage crisis has shown). Be prudent.
After you have sorted out the matter of how much you can afford, you'll need to decide on which type of mortgage you want. The class standby is the 30 year fixed rate mortgage, which means you lock in a fixed interest rate over 30 years of payments. You can also get mortgages with varying rates, and shorter terms. Be sure you research all these options.
If all this seems daunting, remember that there is no harm in renting until you can afford the mortgage you really want. Over extending yourself is always a bad idea.
So, I hope this helps you understand the basics of shopping around for a mortgage. This is not something to be taken lightly, and you should certainly do your research to be sure that you get the best options you can. Good luck in your house hunting!
About the Author:
David Williams is the owner of the Denver Mortgage Loans site, devoted to helping you learn how to get the best mortgage rate in Denver and much more.
posted by Credit Counseling at
6:22 AM
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