Are you purchasing or refinancing a home in 2018? Check out our mortgage tips to help you have an awesome mortgage this year!
Tip #1 – Build up your reserve savings
You may have enough for your down payment and closing costs but if the payout depletes your savings, you could still run into some issues. Typically, mortgage companies want you to have a savings fund in case unexpected expenses occur, so your house payment won’t be affected.
Tip #2 – Consider refinancing into a 15-year loan
This is dependent on a number of factors and you should seek financial advice before making this decision, but if circumstances make financial sense, a 15 year mortgage may be right for you. 15-year mortgages usually have lower rates than 30-year mortgages. Although monthly payments will be higher, you’ll be paying more to principal right away than you would with a 30 year loan, and you’ll pay significantly less interest over the life of the loan.
Tip #3 – Live within your means
A good rule of thumb is to buy the home that you can comfortably afford now, not the home that you can afford in the future. What that means is even though your future financial earning potential looks bright, you should still borrow what you can afford based on your current earnings. You can always upgrade your home after your income increases!
Tip #4 – Take advantage of a cash-out refi
A cash-out refi is a home mortgage refinance for more than the amount owed where the borrower is able to keep the difference. This can be a way to consolidate high interest debt with the goal of saving you money in the long run.