Buying a home is a very exciting moment in anyone’s life. It can be exhilarating, yet also very stressful at times. Proper consideration and planning is key when deciding to buy a home. There are many steps one should consider even before talking to a broker or your bank.
The first thing you should consider is your credit. When applying for a mortgage, lenders will initially look at your credit score to determine if you are a potential candidate. If your credit score is bad then there’s little chance of getting past the first step.
You will also have to start saving for a down payment. This process can take a very long time, so the sooner you start, the better. Obviously, saving more is always better. The larger your down payment, the more you will be able to spend on a home. You also need to be realistic about what you can actually afford. If you’re looking for a rate that will require you to come up with a 20% down payment and you only have about 5%, figure your calculations based on the rate you’ll be able to get. Cutting costs and setting new budgets in order to save for the down payment is a massive help, and although it may be frustrating at the time, it will be worth it once you’re in your new home.
For mortgages, a little research goes a long way. While starting the process, look up current rates, and a ballpark figure for the rate you can afford. Keep an eye on the market and rising or lowering rates and prices. Research is key when looking for the home itself as well. Look at your budget, down payment, location of house and many other variables to determine what’s best for you.
You will next need to determine how you will finance the mortgage. There are many different lengths of mortgages (generally 15-30 years), as well as different types of rates for the mortgages. Research current fixed rates or variable rates that suit you. If you are looking for security that payments won’t increase, a fixed rate mortgage might be the way to go. If you believe mortgage rates could still fluctuate and you want more flexibility, consider an adjustable rate mortgage. Adjustable mortgages have the potential to go down, however they also have the possibility of increasing. In addition, some mortgages have prepayment penalties that need to be considered. These are fees enforced if a mortgage were to be paid off earlier than the original time frame.
The research doesn’t stop there however. Eventually, you will need to submit certain forms, and looking that up beforehand will save you time and headaches. Things such as payslips, bank statements, loan statements, P-60 forms and a few more, will always be required and can cause problems if not planned ahead. By having all the proper forms ready before applying, the entire process can be greatly expedited.
Mortgages can seem daunting and overwhelming to most, and is one of the largest commitments you will ever make. By preparing properly, you can speed up the process and make the entire undertaking less of a headache. The major keys while applying for a mortgage are savings, research and knowing what you can and can’t afford (especially after putting a down payment down). Brokers at Yes.ie are always willing to aid in the process, and are eager to help make this major commitment less daunting.