Mortgage Basics you should know but maybe afraid to ask.
The first time I took a mortgage, I really felt out of my element. I wasn’t even sure what questions I should be asking. I realized in my 5 years a lot of things can change, you may want to buy a bigger home, relocate to a different city, change neighborhoods, your dream home may come on the market. If I had to do it all over again, I would not pick a mortgage with hefty penalties to break the mortgage. This may not be the case for you, you know what you want for the next 5 years. This is something I enjoy discussing with my clients, your needs matter when I am looking for a mortgage for you.
How often can I make payments on my mortgage?
You have the option to make payments weekly, biweekly, bi-monthly or monthly. This will be discussed once a firm purchase and sale agreement has been signed
How much of my payments go to Principal and Interest?
This will depend on the mortgage that fits your situation. With the number of mortgage products out there, there could be many possibilities to this answer.
How do I know what is the best mortgage for me, would it not make sense to just accept the one with the lowest interest rate?
I once took a mortgage myself with a lower interest rate and it was not divulged to me that the penalties would be high should I need to sell my home before the maturity of the loan. With that being said, I ended up paying a lot more in penalties than I had originally anticipated for 2 reasons. 1. I didn’t ask how the rate would affect me other than the size of the payments. And 2, the person I was dealing with didn’t give me all the information I needed.
I visited the bank and they told me I don’t qualify, should I get a second opinion?
It never hurts to get a 2nd opinion. Most times when we visit the bank, there is a quick assessment of your qualifying details, and they shoot out a number to let you know if you qualify or not. Never feel rushed when trying to get a pre-approval, remember that you want someone to go over the details as this will most likely be one of the largest purchases you will ever make. The more time and questions spent with you during this phase of the home buying process can give you more confidence when It comes time to go shopping.
Should I make any major purchases after I have been pre-approved?
NO! You do not want to change any of your qualifying details. Your pre-approval is based on your current financial situation. Any changes and it could mean all the work you have done to get pre-approved won’t help. Always wait until after the purchase of the home has closed to decide if you want to make any new major purchases. Don’t be afraid to talk to your mortgage agent to find out more details on how it may affect you.
