If you are in the market to purchase a home, there are some rules that should be followed to ensure that you do not find yourself facing a financial disaster in the future. Purchasing a home is one of the largest purchases that you will ever make in your life and it is not a decision that should be taken lightly. By following these rules, you will be putting yourself in a good position to pay off your home in a reasonable amount of time.
Go For A 30 Year Fixed Mortgage
Many people choose to go with a 30 year fixed rate mortgage. A 30 year fixed rate loan is considered one of the most reasonable loan products available for mortgage loans and the payment remains the same for the life of the loan. If the mortgage payments at the 30 year fixed rate amount are unaffordable, then the home is too expensive and you should not purchase that particular home.
Many of the people facing financial difficulty with their mortgages today chose adjustable rate loans to purchase a larger house with less money down and lower initial monthly payments. When the interest rates for these loans reset, they found that the payments had become unaffordable. Regardless of the length of time of the loan, a fixed rate loan will always be more predictable than an adjustable rate loan.
Review All Fees And Charges
Some people are finding that the fees charged for their mortgage loan were much more than what they should have been paying. Some lenders added vague additional fees to the loans counting on the chance that the person signing the loan documents would not notice or would be too tired of the process to challenge the fees. Review each of the fees that are being charged before signing any documents and, if you do not know what a fee is for or why it is the amount that it is, hold off on signing until all of your questions have been satisfied.
Stay In The Home For 7 Years Or More
If you are not planning on living in the home for at least 7 years, purchasing the home could be an astounding waste of money. The fees paid to purchase the home and the fees that will be paid for selling the home will erase any gains that you have made monetarily while staying in the home. Add in the cost of everything that will be needed to get the home ready for sale and you may be losing money by moving out before 7 years have passed.