Are you thinking about buying a house in the near future?
Even if you aren't in the market for a new home right now, this is a GREAT time to DO YOUR HOMEWORK!!
What homework is that, you might ask?
For starters, you might want to get in touch with a lender and schedule a sit down meeting. Be sure to take a notepad!
There may be some terms or information that you haven't heard about like PMI (Private Mortgage Insurance) , or Mortgage Points (money that you pay to lower the interest rate on your loan).
Each term that you learn the meaning of may change the way you look at a loan. Each term, when understood, could also make the difference in your monthly payment! It may even affect how much you feel like you can afford to spend.
Just one percent in interest (instead of a 3.5% interest rate, you get a 4.5% interest rate) can make the difference of almost $100.00 per month on a $200,000 loan. PMI insurance (if you don't have 20% to put as a down payment) could cost you another $80.00 per month. A lower FICO score could make a difference in what interest rate is offered to you by the lender.
January is a perfect month to buckle down and learn about the things that can help you when you apply for a mortgage loan. Decide which bills to pay down. Beef up your savings account. Get that FICO score up! Watch the real estate market closely so that when the market picks up in the springtime, you will be ready!
No one wants to be blindsided by unexpected fees at the last minute. If you understand the mortgage process and understand the terms that they use, you won't have to worry about this happening to you!
Happy 2020!