How to Get an Affordable Mortgage
A mortgage is likely the largest loan that a person will take in their lifetime.
Since mortgage terms can last up to 30 years, it makes sense to find a mortgage that can be comfortably paid off over that term.
If you feel like you have no control over the affordability of your home loan, don’t worry.
There are actions you can take to ensure that you obtain an affordable mortgage. Here are some things to keep in mind when seeking a mortgage:
Be Realistic About Your Budget
Just because your friends are taking out $500,000 mortgages, it doesn’t mean that you should try to get a loan in that price range. Be realistic about your income and how much you can comfortably afford to pay on a monthly basis.
Use a mortgage calculator that can help you determine your budget and leave some extra for emergencies or the unexpected. You don’t ever want to face the threat of foreclosure.
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Make a Larger Down Payment
The larger your down payment is, the lower your monthly mortgage payments will be.
In some cases, a larger down payment might also help you secure lower interest rates on your loan.
Aim for a Good to Excellent Credit Score
The higher your credit score, the better mortgage terms you’ll be offered. Even just a few points off the interest rate can make a huge difference.
Shop Around for the Best Terms
One of the smartest things you can do is shop around for mortgage rates. Check rates from multiple lenders to make sure you’re getting the best deal.
You should also take note of the rates, points, and fees associated with each loan to determine which one will work best for you and your budget.
In the end, you’re creating a relationship with your mortgage lender. Make sure you’re working with a lender you feel comfortable with.
All mortgage loans involve fees and additional costs, but with a little effort, you should be able to secure a mortgage loan you’re happy with.