As soon as I realized that my personal financial picture was a little bleak, I started thinking about taking out a personal loan. I wasn't really looking forward to going into debt, but I knew that if I wanted to solve a few short-term problems, a loan would be the way to go. I talked with a few of my local financial institutions to get a good idea of what they could offer me, and then I sat down to go over the paperwork. It was incredible to see how much money I could save by securing a lower interest rate. Check out my blog for more information about loans.
A home is likely going to be the largest purchase you ever make. Chances are high that you will also end up purchasing a home more than once in your lifetime. For most people, purchasing their first home often involves taking out a mortgage for the first time. While the process of buying your first home may seem straightforward, there are a few things that you should know before taking out a mortgage. Here are three things to keep in mind when you are looking for a home mortgage for the first home.
Your Credit Matters
The first thing that you will want to do before even applying for a mortgage is to take a close look at your financial history. Your credit score, in particular, will play a major role in determining whether or not you will qualify for a mortgage. It will also impact your mortgage rate. The better your score, the more likely you will qualify for a loan and the lower your mortgage rate will be. For a conventional loan, you will need a credit score of at least 620. For an FHA loan, you may qualify with a credit score of as little as 500 if you make a 10 percent down payment. VA loans typically require scores of at least 620.
Shopping Around Helps
There are plenty of home mortgage services available that can help you find the right home loan for your needs. Shopping around can help you find the most competitive mortgage rates, saving you thousands over the course of your loan. You can comparison shop on your own or hire a mortgage broker to look at different loans for you. Mortgage brokers can help you find the best mortgage for your needs. The fee for a mortgage broker is typically between 1 and 2 percent of the value of the loan.
Private Mortgage Insurance
Another thing that you may not know about if you are taking out your first mortgage is private mortgage insurance, or PMI. For most loans, PMI is needed if your down payment is less than 20 percent. On average, PMI costs between 0.5 and 1 percent of the loan amount each year. This can add up to thousands of dollars. The best way to avoid it is by having a larger down payment. Once you have 20 percent equity in your home, you can get rid of PMI.Share
20 May 2019