You Should Consider These 6 Things Before Getting a Mortgage

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Marleny Huckshttp://MyrtleBeachSC.com
Marlene (or Marleny as she is known in Spanish) is a mentor, teacher, cross-cultural trainer, storyteller, writer, and for those who have been under her leadership or simply sat across the table from her, she is a mirror of destiny. Her love of word and image were formed early on by one of her heroes, Dr. Seuss. If you asked those who know her well, they would describe her a compassionate, funny, wise, curious, honest, real, strong, sensitive and totally human which comes out as she teaches and writes. She sees all of life, even the most mundane, through faith and believes that who we become as we live this side of the veil is what matters not the journey itself or our circumstances. Marleny Hucks has spent her life crossing bridges. She comes from a diverse background of ministry roles and contexts as well as has transitioned in and out of the business world. Having lived outside the country as well as traveled extensively she has a fascination with culture causes her to live her life within a global mosaic no matter where her feet are planted. Marlene currently lives in South Carolina with her husband David, who owns a news company but who she says is a “crime fighter”, bringing light into darkness in their systems of their city. Marleny currently works as a content management specialist covering Myrtle Beach News for MyrtleBeachSC News.

When you’re ready to buy a home, one of the most important decisions you’ll make is whether to get a mortgage. A mortgage is a loan that uses your home as collateral, which means your home will be at risk if you can’t make your payments. For most people, a mortgage is the best way to finance a home because it offers the lowest interest rates and most flexible repayment terms. However, the whole process can be very confusing and complicated especially if it’s your first time. That’s why it’s important to understand all of the details of a mortgage before you sign on the dotted line. Here are the six most important factors to consider:

Your Credit Score

Your credit score is one of the most important factors when it comes to getting a mortgage. A good credit score means you’ll get a lower interest rate, and it will be easier to qualify for a mortgage. Your credit score is determined by your history of borrowing money and repaying debts. If you have a history of missed payments or defaults, your credit score will be lower. That’s why it’s important to make sure you always pay your bills on time and don’t borrow more than you can afford to repay. You can also improve your credit score by adding a cosigner to your loan, or by enrolling in a credit-improvement program.

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Mortgage Rates

Mortgage rates fluctuate all the time, so it’s important to stay up-to-date on the latest rates. There are two main types of mortgage rates: fixed-rate and adjustable-rate. A fixed-rate mortgage has an interest rate that stays the same for the life of the loan, while an adjustable-rate mortgage has an interest rate that can change over time. Adjustable-rate mortgages typically have lower interest rates than fixed-rate mortgages, but they can also be riskier. On the other hand,  fixed-rate mortgages are more predictable, which can make them a better choice for some borrowers. However, to get the lowest fixed mortgage rates, you may need to pay discount points. These are a one-time fee paid at closing in exchange for a lower interest rate.

The Size of Your Down Payment

The size of your down payment is another important factor when it comes to getting a mortgage. Most mortgages require a down payment of at least 20%, although some programs offer mortgages with down payments as low as 5%. The larger your down payment, the lower your interest rate will be. That’s why it’s important to save as much money as possible for your down payment. You can also use the money you save to pay for other costs associated with buying a home, such as closing costs and fees.

Your Employment History

Your employment history is another important factor when it comes to getting a mortgage. Lenders want to see that you have a steady income and a good job history. Most lenders require at least two years of employment history, although some programs may require more. If you’re self-employed, you may need to provide additional documentation, such as tax returns, to prove your income. If you’ve been unemployed for a long period of time, or if you have a history of job-hopping, it will be more difficult to get a mortgage. That’s why it’s important to have a stable job before you apply for a mortgage. You can also improve your chances of getting a mortgage by having a cosigner who has a good employment history.

Mortgage Terms

The term of your mortgage is another important factor to consider. Mortgage terms can range from 10 to 30 years, with the most common being 15 and 30 years. The longer the term of your mortgage, the lower your monthly payments will be. However, you’ll also pay more interest over the life of the loan. That’s why it’s important to choose a mortgage term that you’re comfortable with. If you think you may sell your home or refinance your mortgage before the end of the loan term, a shorter-term mortgage may be a better choice.

Mortgage Insurance

Mortgage insurance is required on all mortgages with down payments of less than 20%. Mortgage insurance protects the lender in case you default on your loan. The premium for mortgage insurance is paid by the borrower, and it can be either a one-time fee at closing or an annual premium that’s added to your monthly payment. Mortgage insurance typically costs 0.5% to 1% of the loan amount, and if you have a down payment of less than 20%, you may also be required to pay PMI or private mortgage insurance. Regardless of whether you have to pay PMI, all borrowers are required to have homeowners insurance and it’s important to factor this cost into your budget when considering a mortgage so that you don’t end up overpaying for your home.

While there are many factors to consider when applying for a mortgage, these six things are some of the most important. By taking the time to understand each one, you can be sure that you’re getting the best mortgage for your needs. And if you need help, don’t hesitate to reach out to a mortgage professional who can guide you through the process.

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