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6 Mortgage Tips for 2018

Getting a mortgage is one of the biggest and most important financial transactions that you will do in your entire life. That is why it is important to do it carefully and without rushing, especially in a market that is constantly changing. To help you with that, today we will share with you 6 mortgage tips for 2018.



  1. 1   Improve your credit score
         People with the best credit scores will usually get the best mortgage rates, so pay you cards below the 15% limit and don’t let your debt exceed 30% of your limit, pay your bills on time and ask someone with a good credit score to have you as an authorized user.
    2.    Buy what you can currently afford
         Many people are really excited about buying their houses, especially if they are first-time buyers, and they are really ambitious about what they want. However, it is important to be realistic.
    It may seem like in the future you will be making much more money and you will be able to pay what you are borrowing now in case you decide to ask for more money than you should, but this can be a big mistake if in the future if an emergency happens or if your career plans suddenly change.
         Don’t worry, if things go as expected you will be able to improve your house in the future.
    3.    Consider locking your mortgage rate
    It is estimated that buying a home takes about three months. During that time, mortgage interest rates fluctuate and can increase daily. In case you are making multiple offers or you don’t want to worry about this rate, you can lock your mortgage rate. This means that between the offer and the closing, interest rates won’t change during a specific period of time, usually 30, 45 or 60 days.
         The downside to this is that asking to extend it can be expensive, in case the closing doesn’t happens during the specified time.
    4.    Choose your mortgage loan carefully
         There are many types of mortgage loans available and you should choose the one you think you won’t have troubles paying in the future.
         Should you get a fixed-rate loan or a variable rate loan? Mortgage rates are expected to rise this year and continue growing in the future years, so a fixed-rate loan may be a good choice to plan what you are going to pay in the future without surprises.
         Should you get a 15-year loan or a 30-year loan? Rates of 15-year loans are usually lower, you will finish paying sooner and getting a 15-year loan means that you will pay less interest. However, monthly payments will be higher and you must be able to face them.
    Do you know what will you to need to refinance in the future if you are not comfortable with your choice?
          This is a great mortgage tip for 2018, so consider all the pros and cons and think carefully before making a decision.
    5.    You don’t need a 20% down payment but you can avoid PMI
    A lot of people think that they have to make a down payment of at least 20%, but in reality you can actually pay much less. However, if you decide to do it, you may be required to pay a Private Mortgage Insurance (PMI) and its costs will depend on how much you borrowed.
    6.    Avoid waiting for a price drop on a house
    This one is an important mortgage tip for 2018 because the house inventory is limited and in many places there is not enough to meet the demand. Also, prices are increasing slowly.
          This means, that if you want to offer for a house but you want to wait for a price drop, chances are that someone else will buy it.
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