Whether you’re a first-time home buyer or you’ve purchased other homes in the past, chances are pretty high that you’ll need to negotiate a mortgage when it comes time to move. Mortgages can make it far more feasible for the average American to buy a home, but that doesn’t mean that the process of deciding on a mortgage is easy. In fact, 59% of American homeowners surveyed in 2016 said they wished they understood the terms and details of their mortgages better.
It’s far better to take your time when exploring your mortgage loan options, rather than rushing to sign on the dotted line. Otherwise, you could end up being stuck with the type of home mortgage Redding CA homeowners can’t really afford. If you’re a first-time home buyer or you simply want to make smarter decisions next time you purchase property, you might want to keep reading. We’ll discuss some tips to keep in mind when determining the best mortgage for your future (or even your current) home.
Research Various Types of Mortgages
While there isn’t just one home mortgage Redding CA homebuyers tend to pick, there are a handful of basic mortgage types you should know about. You’ll want to do some research on each type and eliminate the ones that aren’t applicable to you. From there, you can narrow down your choice of loan and talk to lenders about those options. Conventional mortgages, for example, are not backed by the federal government, but USDA loans, VA loans, and FHA loans are. You may qualify for government-backed loans if you have ties to the military, want to live in a rural area, or have a lower credit score. Otherwise, a conventional mortgage may be the way to go.
Consider Loan Length and Structure
The type of loan matters, of course, but there are other factors to consider when choosing the kind of home mortgage Redding CA buyers are able to take on. For example, you’ll also need to think about the length of your mortgage loan. Typically, you might find 10-, 15-, or 30-year loans (though some lenders offer different variations). While a 30-year loan will come with lower payments, it’ll also come with higher interest rates. The opposite is true for a 10-year loan. That said, you might not be in a position where you can make higher monthly payments and be able to pay off your mortgage in record time. There are also adjustable rate and fixed rate mortgages to consider, each of which has its pros and cons.
First-time home buyers, in particular, may have trouble figuring out which loan structure is actually best for them. You’ll need to create a detailed budget to determine just how much you can pay each month and which option will allow you to live comfortably.
Find a Great Lender
Regardless of whether you’re a first-time home buyer or you’re seasoned in all things real estate, you’ll want to find an excellent lender to obtain a mortgage. You’ll want to focus on lenders that won’t charge prepayment penalties and that will be transparent about their pricing. Ideally, you’ll want to choose a lender that will end up saving you money and that you can trust. Keep in mind that it’s best to shop for lenders early, as having a pre-approval letter from your lender can go a long way in helping you make a home purchase. Make sure to give yourself enough time so that you don’t have to rush this process.
If you’re a new buyer seeking the best option for a home mortgage Redding CA has to offer, we’d be happy to guide you through this unfamiliar territory. For more information on your mortgage options, contact us today.