If you have been preparing for a home purchase, you are in the process of paying off your debt, saving for an emergency fund, and getting additional funds for your down payment and closing costs. Next, you will want to assess your borrowing options.
- Lending: Lenders are individuals, groups, or institutions that let you borrow money for a set period and repay it with interest. They come in various forms, from banks and credit unions to friends, family, and specialized institutions. For our purposes, we’ll assume using a bank or credit union.
- Mortgage: A mortgage is a loan secured with real estate or personal property. First, research and know the best first-time home buyer mortgage options.
If you are a first-time home buyer looking to purchase your next home or an investment property, assess those options specific to your needs. Do research online to know the types of programs out there. However, as a locally owned and operated real estate agency, we prefer working with local lenders. Be aware of that as you start looking around and registering on sites for information. If the online resources ask you to disclose personal information, consider pausing and making a call instead.
Consider a 15 or 20-year fixed rate mortgage. This will help you get in a stronger financial position more quickly. However, the payment would be higher monthly, and your path to ownership would be closer. You’ll save money over the life of the loan when you choose a shorter period. And make sure you get your interest rate locked in, so it doesn’t change on you mid-loan. The math is easy; if you can take a 15-year mortgage, you’ll have the loan paid off in half the time as a 30-year mortgage, and you’ll save all the interest you would pay over that period.
Want more guidance? Give us a call. We are happy to help you explore your real estate investment options 307-635-0303!