Are you in the preliminary stages of the home buying process? It is important to learn about mortgages if this will be your first home, or brush up on your knowledge if you are a current homeowner. By understanding the process and important aspects, you will be better prepared as you make your plans to buy your first or next home. Learn about the different types of mortgages available, an inside look into the application process, and tips on the house search and closing process explained by Denver realtors.
Fixed Rate vs. Adjustable Rate
Prior to learning about the different types of mortgages, it is important to know about fixed-rate and adjustable-rate mortgages. Fixed-rates maintain the same throughout the life of the loan. This is ideal for the person who likes knowing that their payments will be consistent. Adjustable-rate mortgages have a lower interest rate up front that will be fixed for a specified amount of time. Once that time period is over, your interest rates will change and will not be as stable as a fixed rate. This is a great option for a person that may only plan on staying in the home for five years or so.
Types of Mortgages
When it comes to the different types of mortgages, there are loans through the government or through standard banks. Government loans include Federal Housing Administration (FHA), Veterans Affairs (VA), or United States Department of Agriculture (USDA) loans. If you are a first-time homebuyer, you can qualify for one of those loans through the FHA. It will allow you to make a lower down payment to help you get started. If you are in the military, you can look into a VA loan, which allows you to get the home without a down payment. Last, USDA loans are ideal for those who live in rural areas that may not have that much income coming in. You can talk to your realtor if a government or standard bank mortgage is best for your situation when finding a lender. From there, they will walk you through the application process in which you will need to gather your financial forms such as pay stubs, tax information, and more. As you begin to plan for a budget, use this mortgage calculator
House Search and Closing
As you search for houses, make sure you work with your realtor to know what your budget so you can find a home within that budget. Think about long term needs for the home too, and if certain things may need fixed down the road. You will need to make sure you can afford them. When the exciting time comes to close on your new or next home, you will bring any paperwork needed that your realtor has informed you about, and down payment. A majority of the closing will be signing all the paperwork that will transition the home to you. You will receive copies to file and keys to your new house! For a more in-depth look, review Investopedia’s 13 steps to closing a real estate deal
To help you find your next home and walk you through the mortgage process, Giving Back Group can help. Contact us
today to see how we can help you kick off the process.