Things to Consider When Choosing a Mortgage

If you are considering buying a property, there is a good chance that you will need a mortgage. Buying a house is likely the biggest purchase you will ever make and for most people, it is also the biggest financial commitment you make. Mortgages are designed to last for several years, so before you commit to one, you want to make sure that you are well-informed. Here are some tips to keep in mind when you are looking to buy a house and negotiate a mortgage.

Save up the best down payment you can. One of the best things that you can do before buying a house and committing to a mortgage, is to make sure that you have saved up enough of a down payment. The amount of money you are able to put down can influence your credit rating and the length of your mortgage. Putting more money down at the beginning will likely save you money in the long-term. A lot of brokers will tell you that 10% is the suggested minimum down payment, but if you can it is better to put 25% down. Every lender will have different guidelines and there are no hard rules, but it is better to put down the biggest down payment that you can.

Decide on the type of lender you want to work with. You might associate mortgages with banks, but that doesn’t have to be the case. You can go through a bank or you can find a firm that specializes in mortgages. You can also get a private mortgage, which are often negotiated by neutral third-parties. There are advantages and disadvantages to each type of mortgage and a lot of it depends on your personal financial decision. Your specific situation may limit your options, such as contractors who would need to find a lender that can provide contractor mortgages

Choose the right person. Just like you want to choose the type of lender that best works for you, you also want to choose the right individual. You will be working with an actual person, not just an anonymous institution and it’s important that you feel comfortable. Whether you are going with a bank or a private mortgage, you still want to choose the person representing you very carefully. After all, buying a house is a major purchase and you want to make sure that you are working with someone whom you can trust and feel comfortable with.

Be informed. Buying a house and committing to a mortgage are big decisions and you want to make sure that you are prepared for them. It is important that you are well-informed and that you know what kind of terms you will be looking at ahead of time. It is also important to choose your mortgage broker carefully and to make sure that you have chosen the right type of mortgage for your needs. It might seem overwhelming, but if you do a little bit of work ahead of time, it doesn’t have to be.

Comments

  1. Jon @ Money Smart Guides says

    My wife and I are saving for a new house and we going to put down as much as possible. Not only will it get us a lower interest rate, but it will allow for a smaller monthly payment, which will allow us to get a 15 year mortgage instead of a 30 year, saving on interest in the long run.

  2. Thomas @ Best Credit Cards Canada says

    When we bought our first house we met with a mortgage broker that was recommended by our real estate agent. We really liked her and thought we would give him a try. Boy was that a mistake. He seemed very unorganized, which is not the vibe you want from a mortgage broker. We ended up going with another referral from a friend. This guy ended up being great. Kept us very well informed and was on top of everything. Choosing the right person to work with is key. Buying a house is a huge life event. Its full of stress and anxiety. You want good people around you to support you in that decision/process to make it as easy as possible.

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