Purchasing a home is one of the most exciting and stabilizing investments of your life. But because of the expense, there are many ways you may be spending more money than you should. If you’re wondering about the financial soundness of your home investment, here are some things to consider.
Investing In Too Much Home
Many homebuyers are so gung-ho about having their own home that they forget a mortgage takes many years to pay off. There’s a lot of living to do in the interim. While you may be looking at the monthly cost of your mortgage as something to get through, it’s more important to find a home that will provide you with a more flexible lifestyle. Instead of spending half your income on your home, it’s better to choose a more affordable option that won’t lead to buyer’s remorse.
Putting Less Than 20% Down
One of the greatest struggles for those who want to make the leap into homeownership is the down payment. Many buyers will put down a lot less than 20%. While this might seem like a better deal in the short term, putting 5 or 10% down means you’ll pay for mortgage insurance in case you default on your payments.
Not Asking The Right Questions
A house is likely your most valuable asset. It’s a good idea to know as much as possible about your mortgage before you rush toward closing day. Start by asking which mortgage option is best for you. Your mortgage lender will be able to answer this question once you’ve completed an application. The lender will look at your employment, income, assets, credit, debt, expenses, down payment and other information about your finances. Research the major questions you should ask your mortgage lender before signing up for a loan.
It can be overwhelming to buy a home with all of the information and energy that goes into finding the right place and the right price. However, by being realistic about what you can afford and searching for the best loan for you, you’re well on your way to a sound purchase. If you’re currently in the market for a mortgage, contact your trusted mortgage specialists for more information.