Dealing with a mortgage can be a serious challenge if you haven’t dealt with one before.
No matter how good one is with money, a mortgage is a different type of loan altogether. Fortunately, Business Insider has broken down the loan process for beginners and identified the most important tips to follow.
There are many sources of confusion in the world of mortgages. There are also myths and common beliefs which won’t be helpful to you as someone who’s just trying to pay off a new mortgage. Before you jump right into it, consider a few of these tips:
- The “20% down” down payment is a myth. Depending on your location, your credit score, and several other factors, this rate can vary significantly. You can get a mortgage with a down payment of as low as 3.5% in the US, but typical down payments can range from 5-20%. Keep in mind that paying a larger down payment is easier in the long run, but also remember that you have options.
- Mortgage applications can hurt your credit score. Pulling too many applications can be harmful to your finances, and should thus be avoided.
- You are free to shop around and compare different loans. Lender fees can also vary significantly. When there are so many different variables at play for such a serious financial decision, it actually behooves you to look around a bit.
- While appraisals were once necessary, there are ways around this former necessity with today’s information.
- Lastly, if you can close a deal quickly, you can score a lower interest rate. A lower interest rate will truly be a godsend in the long-run, so there is no excuse to not try to secure one.