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Mortgage Tips For Newlyweds
To start off, be aware of interest rates! You need to locate the lowest rate you can find (this should be a no-brainer). Also, ensure you get a fixed interest rate. Variable rates are risky because they can go up after the opening rate runs out.
Be attentive of what you can pay for. There is no need to hurt yourself money-wise right off the bat. Keep in mind that you don't want your mortgage to exceed 20% of your income after taxes.
If you are a veteran your state might offer a program with competitive rates. As well as being authorized for a VA loan, which does not necessitate a down payment, mortgage programs for veterans more often than not have much lower rates than banks. Find out if your state has a veteran's mortgage program.
It would probably be a good idea for you to rent in the beginning. A lot can happen in the initial years of marriage while you and your spouse are deciding where you want to live and what kind of house you want to buy. Another great benefit of waiting is it permits you to set aside some money which you can later use on the down payment.
Paying a down payment when getting a house can get rid of that irritating home owner's insurance cost. Home owner's insurance (not to be confused with home insurance) is a fee that mortgage companies charge when a home buyer cannot afford a down payment. The monthly home owner's insurance payment is included in with the monthly mortgage payment (note they are two separate things) and frequently is paid out over ten years. This separate money protects the mortgage company if the house gets foreclosed.
Another plus to waiting is it allows you more time to increase your credit score, which could give you a better rate. To increase your credit score, obtain one credit card for you and your spouse with a low max limit and low interest rate, and make payments on it each month on the dot. These well-timed payments will be given to the credit bureaus and will shed you in good favor with them.
Another important thing to consider is getting a 15 year mortgage instead of a 30 year mortgage. Then, make bi-weekly payments instead of monthly. Doing this will make 13 payments per year instead of 12, and you will pay off that 15 year mortgage in about 11 years! You will also be building valuable equity in your home.
Most banks will be glad to help you with this. In fact, most banks have programs which will automatically take the money from your account bi-weekly (I have mine set for paydays). This is great because you don't have to be bothered with writing a check and lose sleep if your payment will make it on time. Just make sure the money is there!
Acquiring a house and a mortgage can seem nerve-racking for first timers, but being patient and having a game plan will serve you well. Remember to be patient when purchasing a home. There is a lot to deliberate and hurrying into things will not serve you well.
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