Qualifying for a home - Get the most out of your mortgage with these 3 tips
There are few life transitions that bring about as much discussion and angst as going from renting to buying your very own home. The old saying goes about renting is that the rent is too darn high. That may be true. But the same can be said about buying a home.
But how do you know when the time is right to buy and when you do how best to optimize that payment and get the best interest rate on your mortgage? Here are a few tips that I’ve learned by helping thousands of homebuyers go from renting to owning.
Can you afford a home? So how do you know if you can even afford to buy a home?
Remember personal finance is personal, so everyone has a different idea of what’s affordable, but here are two rules of thumb: 👉 Use your current rent as a starting point. You can use a mortgage calculator to see an approximate sales price that will have a similar payment. 👉 Keep your mortgage payment under 30% of your gross income
These are general rules and it’s best to talk to a lender early in your homebuying process. There are many different online calculators to help you budget but make sure it accounts for several factors in the mortgage and not just the principal and interest payment.
Optimize your mortgage payment I cannot believe how expensive homes have gotten during this past year-plus. Between prices and rates going up, it can be really stressful. But one thing I help homebuyers with is how best to optimize their mortgage payment. Not sure what that means? Well, here are a few ways to work with your mortgage lender to lower the mortgage payment and optimize it for the long term.
Depending on what loan type you’re using you could: ✅ Pay points for a lower rate. ✅ Buy out your PMI or finance it into the loan instead of paying monthly. ✅ Use an adjustable-rate mortgage and get a lower rate.
How to get a lower rate on your mortgage If you’re in the market for a home, I bet you’re wondering how you can get a lower interest rate on your mortgage. Given how rates have gone up compared to several months ago when you probably started thinking about buying, I know you could sure use some of these tips.
As a mortgage lender, there are two things I suggest you do. Make sure to get at least two quotes from different lenders. Don’t just focus on rate though – be sure to compare lender fees as well. Look at options to pay points – additional lender feeds – to buy down your rate.
While these are just a few of the smart homebuyer tips to help you get the most out of your experience and a lower overall payment, be sure to follow me for even more tips. And, let me know your thoughts or other tips you’ve heard about at firstname.lastname@example.org.