For most people paying for a home in cash isn’t always an option so it’s important to find a mortgage within their means.
The first step to getting a mortgage is pre-approval. You should have a down payment of at least 10%, but these days, some lenders require more. Remember, you don’t have to borrow the full loan amount you’re pre-approved for. Instead, stay conservative and look for homes in a price range that will keep your mortgage payments to about 25% or less of you take home pay for a 15-year note.
The 30-year mortgage was designed to enable borrowers to buy more house than they could afford by spreading the payments out over a longer term. On top of that, those homeowners pay tens even hundreds of thousands of dollars more in interest.
If you don’t pay cash for your home, get a 15 –year mortgage with at least a 10% down payment and monthly payments that are no more than 25% of your take-home pay.
The difference between a 15- and 30-year mortgage with a 4.5% interest rate on a $225,000 home is $101,000 over the life of the loan. What could you do with $101,000? Pay for your kid’s college? Buy a car? Add to your retirement?
Shop for homes with your head – not just your heart!
Call Rebecca Schmitt with Paz Global Real Estate for all your Real Estate needs
Rebecca Schmitt
Certified International Property Specialist, Realtor
Paz Global Real Estate
786-216-3557
rebeccastore@yahoo.com
