Knowing what questions to ask puts you in charge of the home buying process. Too often consumers focus on issues which aren’t the most important ones for them.
It’s tempting to ask, “What are your rates?” and then choose the lowest. Yet more-critical questions are, “What will my total home purchase costs be?” and “How will they fit into my household budget?”
What you spend on a house involves more than simply your loan’s rate. Selecting the right mortgage for your situation is a decision which should be made carefully, since it will affect you as long as you live there.
Borrowers can make tradeoffs between their mortgage rate and fees paid for obtaining their loan. How much cash you have to put into the transaction, your current income, and how long you plan on staying in the house help determine how your purchase should be structured.
Numerous options are available, so you can select what works best for your household. Yet many times borrowers aren’t aware of these possibilities, and choose the simplest home loan offered.
A great way to compare mortgages is by looking at your total costs over the time you expect to live in your home. You’ll also want to make sure your projected income will match your payment schedule.
Taking an adjustable-rate loan isn’t risky if you know that in the future your household expenses will be lower, or your income will increase. It’s also possible that you’ll move before your mortgage payment resets.
READY TO BUY
Today’s conditions offer advantages to smart homebuyers. First, interest rates remain near record low points. You also can find bargain prices on many homes. Purchasing actually is cheaper than renting in many communities now.
Some prospective purchasers are anxious about house prices dropping further. But that concern may cause them to miss the larger point.
“If prices fall another ten percent, but mortgage rates rise one percentage point,” states John Burns Real Estate Consulting, “fewer people will be able to buy a house.”