Being able to reach a certain level of financial stability and buying a house is a lifelong goal for many people. However, this big leap towards homeownership is a big decision to make and one people should carefully think through. Finding a perfect home and securing a mortgage for it is not a walk in the park. Think of all the times you signed a rental agreement with your landlord moving in and out of different spaces, only much more complicated.
There is a lot of information to process and internalize all at the same time. You might find yourself constantly shoved with real estate jargon such as “pre-approval” or “pre-qualification” on multiple occasions. Trying to make sense of it all to stay on top of your dream might leave you in a state of frustration, but worry not, more people sympathise more than you think.
It is perfectly normal to not know all there is to know about mortgage plans. Don’t let this dissuade you from going after that dream house you so badly want for yourself or family. Instead, dedicate the time and effort in learning the essentials. This way, you will make an informed decision properly.
What is a mortgage?
Among the many purchases you will make in your entire lifetime, your first home will probably be the largest and most important one you will ever make. As a first-time homebuyer, it is important you have a working knowledge of the whole buying process.
A mortgage is a loan you will use to buy your first house. It is essentially similar to all the other loans you have probably heard of, like educational or medical. Only this time it is different, a mortgage loan is specifically used when purchasing real estate. Apart from this, mortgage loans can also be customized to your preference, much like the latter.
Why do I need a mortgage?
Most first-time homeowners are perfectly aware of the never-ending amount of zeros involved with the financial aspect. No matter what price tag that may be, buying a house is not cheap business and rookies do not have the means to have cash on-hand to purchase it from the get go. If they have cash, most prefer to save it for other home expenses, like getting a construction loan.
This is where loans come in. With it, you will borrow money from a lender to purchase a portion of the home. This benefits the borrower, because when you do finally get that dream home you have always wanted. You will do so without breaking the bank and going penniless.
How do I get a mortgage?
First, get qualified for it. To qualify for a mortgage loan, meet certain standards of whichever loan type you think would best fit the packages of your new home.
Each loan type is different, and there are many to choose from, so make sure you do extensive research before committing to a single one. They will all require different standards and offer different rates. Aside from this, do not be alarmed if they look into your personal and professional information such as your employment history or savings account.
While it is fun to daydream about which type of floors to get or whether you want to spring for a balcony in your first home, it should be as equally important to prioritize how you will afford it. It may take several months or years, but always remember nothing worth having comes easy.