Five proven tips to affording your first mortgage
If you’re considering buying your first home, you’ve probably heard a lot of advice from multiple people (whether or not you asked for it). So how do you know what tips to trust? To help you get the best deal on your mortgage, here are six pointers that have been proven to help buyers purchase their first home:
1. Get “down-payment ready”
It’s a good idea to make a 20% down payment on your mortgage if you want to start building equity right away (although most lenders will accept less). Either way, begin bulking up your savings now.
2. Boost your creditworthiness
Whether or not you’re approved for a mortgage depends largely on your credit profile. Before you apply, reduce large balances and pay more than the minimum every month on credit cards. You’ll likely improve your credit score and demonstrate that you handle credit responsibly.
3. Know your loans
A fixed-rate mortgage might be ideal if you plan to grow your family or stay in one house for 30 years. However, buyers who opt for an adjustable-rate mortgage (ARM) will often pay less in the beginning of the loan, and may want the flexibility to move within the next 10 years. Know your options and choose the best one for your future.
4. Get professional guidance
If you want to buy but aren’t sure how a monthly mortgage payment will fit into your budget, certified financial counselors can help. They’ll break down your budget to make sure you’re purchase-ready.
5. Remember the other costs
Of course, a mortgage isn’t the only cost you have to consider. Homeowners have to pay insurance, property taxes, HOA fees and more. Make sure you’re prepared for the total price of homeownership.