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Acquiring a mortgage has its advantages and disadvantages. For one, it allows borrowers to purchase a home sooner. However, it comes with a monthly responsibility which can be a burden if not taken care of properly.
To help you have a better and healthier borrowing experience and prevent you from becoming house poor, here are 5 golden rules to consider when acquiring a mortgage.
Before you start applying for a home loan, build an emergency fund first. Most financial experts advise you to keep at least three months' worth of salary. This ensures that you'll have enough to cover your expenses if ever something comes up, such as job loss or anything that would cost a substantial amount of money.
In other words, "live within your means".
Depending on your credit health, you might be approved for a bigger loan which you can use to purchase a bigger house. That's great! However, just because a higher loan is available to you does not mean you should take it immediately. Consider your lifestyle and expenses when figuring out how much house you can afford. If you're going to spend most of your salary on paying off your mortgage, your other financial goals such as retirement, vacation, or your child's education might become harder to achieve.
Don't settle for the first mortgage offer that you receive. Instead, shop around for the best deals and rates that will suit your situation and financial needs. Using a mortgage lender can make this rule easier for you to follow. At Ebenezer Mortgage Solutions, we will find the best deals for you and process the applications to multiple different lenders, so you don't have to. And with our experience and knowledge, we'll also help you decide which one suits you best.
Applying for a mortgage involves a lot of paperwork. Although it might take a while, make sure that you understand what you're getting into before signing it. This way, there will be no unpleasant surprises. At Ebenezer Mortgage Solutions, we're always ready to help you better understand the terms and conditions of your contract. And if you have any questions or concerns, never hesitate to ask.
Make your monthly mortgage payments on time, every time. Missing a repayment can significantly impact your credit score, which might affect your borrowing capability in the future. Additionally, after a grace period of usually 10 days, lenders will charge a late fee of 5% of the overdue payment. And if you fail to pay this late fee on your next payment, your mortgage will not be considered current. If you miss your mortgage repayment for 90 days, this would mean that you have defaulted on the loan, and your lender can repossess your home.
If you have more questions about mortgages or need help with your mortgage application, Ebenezer Mortgage Solutions will help you. Call our mortgage broker today at (813) 284-4027, and let's work together on getting you the home of your dreams.
