We
all know that buying a home or a piece of real estate is among the
biggest financial investments an individual does in their entire life.
Many of us tend to opt for home-financing schemes, offered by banks or
financial institutions, to sponsor our abode.
These mortgages, as the officer handling mortgages in Wareham MA
for a credit union points out, requires a bit of groundwork research
and understanding on the part of the loan applicant. You see, applying
for mortgages is an elaborate process – marked with multiple steps and
formalities. These involve,
- Some calculations on the part of the loan applicant
- Fulfilling the loan criteria put forward by the lender
- Coming forward with a respectable credit score
- Bringing down payment
- Considering other costs after the home is bought
These
pointers, and similar other factors at a time, can cause anxiety and
stress for potential homeowners. But don’t lose hope. There are ways to
overcome anxiety and achieve the goal of buying your home.
Some common anxieties associated with home buying and ways to overcome them
Buying
a home, especially for a first-time buyer, can be exciting as well as
terrifying. The entire journey is nothing less than a rollercoaster ride
– at the end of which you are handed your home keys. Here are some of
the common worries in the minds of potential homeowners.
Worry Factor 1: Not enough credit score
The
credit score is an important factor the lenders consider while choosing
their potential borrowers. However, the good news is – it is not the only one. That being said, you cannot ignore the importance of a good credit score in the loan application.
Before
placing the loan application, it is important to know what is the
preferred credit score for the given financial institution and where
does your credit score stand. If your credit score is not up to the
mark, make sure to pay the outstanding bills and debts on time. Also,
hard inquiries on the credit score can impact the negatively impact the
credit score. So, beware of making them frequently.
Worry Factor 2: Not enough cash for a down payment
Well, usually you have to pay 20% as a down payment for buying a house. But that is not written in stone.
You can put a forward lesser percentage of the amount as down, but
there is a catch. In these scenarios, you might have to put forward
private mortgage insurance (PMI), which can be an added cost to your
monthly installments.
As providers of mortgages in Wareham MA,
a simple solution for this problem could be to ask the family member
for the down payment amount as a gift. Although, the amount has to be
thoroughly documented along with the statement of the give giver. Apart
from that, you can seek assistance from the National Homebuyers Fund.
Worry Factor 3: Higher debt, lesser income
Debt to income ratio (simply put, a portion of the income that goes to paying debts each month)
is another factor considered by the lenders while considering you for
the loans. Each lender has its own set of criteria, but as a
ground-rule, it is better to minimize the number of debts you have. One
way of doing so could be to increase income or to pay off some of the
existing debts.
Overall,
finding new sources of income and planning ways to repay the debts can
help in realizing your dreams of buying the home.
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Worry Factor 4: Too high-interest rates
The
interest rate on the mortgage is the overall cost of the loan over the
tenure. A slight change in the interest rate can impact the overall cost
of the loan, for better or worse. Usually, most homeowners stress on getting a lower interest rate against their mortgage.
However,
a report presented by the Consumer Financial Protection Bureau revealed
that close to 50% of the burrowers do not go for loan shopping before
applying for a mortgage. Loan shopping can be beneficial leading to the
most lucrative interest rates, especially for people with not so
favorable credit scores.
Worry Factor 5: FOMMPs – Fear of Missing Mortgage Payments
We
all know that buying a home could be one of the biggest financial
decisions a person takes in their life. And the fear of not being able
to pay off the home debts can be mortifying for many. Well as experts
dealing with home mortgages in Wareham MA recommend
setting up emergency cash funding for carrying out home maintenance and
other associated costs after buying the property. The money would help
in easing stress about missing out mortgage payments during the
emergency home improvement project.
It
is ok to feel worried while making the biggest financial decision in
your life. But, don’t let it come in the way of buying your own home sweet home. Your Wareham neighborhood financial institution, PCT Federal Credit Union, can help you in buying your home. Visit http://www.pctfcu.org/ or call 508-291-0777 to know more.
