3 Things All First-Time Home Owners Should Know About Mortgages
Even though the younger generations today have made so much progress in terms of learning how to save up for the future and come up with financial plans that will help them retire early, a majority of them still seem confused or worried about the idea of owning their own property - simply because it’s hard to understand the many factors that need to be considered when buying your own property.
And that’s why we felt the need to put everything a first-time homeowner needs to know into one space - helping new owners know what to expect and how to plan ahead for the property they’d like to purchase.
Buying your own home is one of the most important decisions you’ll be making in your life, so you need to be aware of your best choices to make this decision a good one. Without further ado, let’s get started.
1. Understand the terms
One of the most common reasons that prevent Millennials and Gen-Z from buying their own homes is the fact that they feel overwhelmed by the legal and financial jargon that’s thrown at them from all sides (including the internet) when they try to get advice on how they should go about their mortgage.
The best place to start for someone who is new to this space is by taking the time to understand each and every technical term that they’d be reading or hearing about before they jump into this venture.
Just understanding the basics will help clear most of the doubts and confusion you have in your mind, helping you make the right decisions while also being confident about them.
2. You need to have a good credit score
Getting a mortgage is a pretty big deal, and you need to prove that you have a history of keeping a good credit score by managing your finances well. While you can still get a mortgage loan without a credit score, you have more chances of getting mortgages at the best price if you have an excellent financial history.
Mortgage credit scores are slightly different from credit and karma scores. They follow the FICO model - where the higher your FICO score is, the better your mortgage rate will be. You can easily boost your FICO score by following some of these best methods for the next 90 days or so:
Never miss a payment, and always pay it well ahead of the deadline to avoid any missed dates.
If you happen to be past your due on older payments, start by quickly paying them off and then begin from there. It’s never too late to start from scratch and work yourself up from there.
Use your credit card for as many bills as possible to increase your rating. It especially helps if you use it for large payments at merchant stores.
3. Find the right source to get the best offer
You may feel tempted to settle for the first offer you see or go with a plan that seems safest to you, but don’t settle for any until you’ve completely gone over all the home mortgage loan offers from different financial lenders and institutions.
For instance, under some plans, you may only need a 3% down payment in certain cases, so it helps to check your home mortgage options and be aware of what your best price is, along with the different perks and benefits and then go ahead with it. Some lenders even offer an online mortgage calculator, which will help you assess the potential rate you can get based on all the other factors involved.
