Getting Started With Financing
If you have been thinking about buying a home you may wonder how to select the right financing for your budget needs. There are basically two conditions that you must be able to meet, the first being the down payment requirements and the second being the monthly payments of principle, interest, taxes, and insurance. Many types of mortgages are now available and new plans are continually being introduced. With all these choices, you may wonder what to look for.
Some of the mortgages now available are traditional plans, with interest rates and payments that remain constant throughout the loan and pay off your debt over a long period.
Others represent a departure from the older plans: they involve more risk for the buyer and are frequently tied to changes in the market. But they also can make home buying possible and may offer lower interest rates.
Useful Tips
- Don’t consider yesterday’s assumptions about today’s real estate market.
- Consider you total housing cost affordability is the key. Include loan payments (now and in the future), maintenance, property taxes, and your anticipated income changes.
- You may be able to combine two or more mortgages. Look into several sources of financing.
- Negotiate with the seller or lender.
- Better terms may be available than those initially offered.
- This could be the largest investment of your life. Consider getting a Real Estate Broker to represent you.
- Study all available materials about your mortgage cost. With loans from institutional lenders, the creditor is required to give you a statement of your loan cost and terms before you sign the agreement. This information will include the “annual percentage rate” (APR) which measures your total credit cost, including interest points, and mortgage insurance.
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