If you’re considering a home purchase in the near future – or within a few years – you should brush up on your mortgage knowledge. Learn what to do before applying for a mortgage, what to watch for during the process, and how to use a mortgage after you’ve bought your home.
Your Credit is Crucial
A mortgage is a big deal. The bank risks a lot of money, and they have been increasingly cautious since the subprime mortgage debacle.
To qualify for a mortgage, good credit is essential.
What is Credit?
How Credit Scores Work
How to Build Credit
How Much Home Can You Afford?
Mortgage lenders want to make sure you don’t borrow too much. They look at how much your mortgage payments are relative to your income, ensuring you have the ability to pay. Run your own mortgage calculations to understand what you can afford.
Understand Your Debt to Income Ratio
How Your Debt to Income Ratio Affects Your Mortgage
Calculate Mortgage Payments
First Time Home Buyers
If you’re a first-time home buyer, pay attention. You may qualify for a special mortgage. Sometimes these are extremely valuable, and sometimes they’re not. Make sure you are familiar with these programs and restrictions on these mortgages.
How First Time Home Buyer Loans Work
How Points Work
Pay Points or Bigger Down Payment?
If You’ve Found Your Dream Home
A 30-year fixed rate mortgage is generally the safest and best bet, especially if you expect to live in your house for more than 5 years or so.
It’s easier to understand and pick apart a fixed rate mortgage.
How Fixed-Rate Mortgages Work
Get the Wrong Mortgage by Comparing APR
If You Can Afford a Riskier Mortgage
There are a wide variety of mortgage options out there. You may find that some of the most creative ones (like interest only, negative amortization, and adjustable rate mortgages) work best for you.
These mortgages might work for self-employed individuals with unpredictable (but sufficient) income, real estate investors, and buyers with a specific plan that fits these loans. However, you can also get yourself in trouble, so it pays to learn about the risks. Find out what to watch out for in each type of mortgage.
Low Documentation Loans
If You’re Considering a Second Mortgage
A second mortgage allows you to borrow against the value of your home. You can get access to a large line of credit with an attractive rate. Find out how to use a second mortgage, and what the pitfalls are.
How Second Mortgages Work
Second Mortgage Quick Tips
The Home Equity Loan Tax Deduction
If You Have Little Money for a Down Payment
It’s possible to get a mortgage without a 10%-20% down payment. Even today, people get a mortgage with no money down. There are a few legitimate programs allowing you to get a mortgage with very little down. Get acquainted with some of the safer mortgage programs out there.
The Expanding American Homeownership Act
Buy a HUD Home and Save
Refinancing a Mortgage
There may come a time when you can get a better mortgage. Perhaps mortgage rates have changed, or your credit improved.
Refinancing a mortgage is a powerful move when done for the right reasons. Find out when it makes sense to refinance a mortgage and how to do it.