What to Know Before you apply for a Mortgage

Before you start looking for that perfect home in the Wellesley real estate market, it’s a good idea to find out what kind of financing you qualify for. This will give you a good idea of what kind of home you can afford and will help you eliminate homes and find the perfect fit faster.

Here are just a few things you should know before you apply for a mortgage.

Your Credit Score

A good credit score will come in handy as you apply for a mortgage, so know what yours is and do what you can to keep it healthy. Paying bills on time and avoiding closing bank accounts can help you maintain a good score.

If your Lender is Trustworthy 

Talk to others, get recommendations and read reviews about different lenders before you choose one. You can also set up appointments with a few different businesses to find the right fit for you. 

If you can afford a Down Payment

Many mortgages require a down payment, so find out if yours does before you sign for it. It’s smart to have a good idea of what kind of down payment you can afford before you start applying for loans. This will make the process much faster and easier.

What the Interest Rates are

Ask about interest rates and whether they change over the course of your mortgage. This is a good way to compare lenders so you can find a mortgage you can afford.

What Kind of Loan You Want

Before you apply for a loan, learn about the different kinds there are and which options best fit your needs. A few common loan types include: 

Fixed-Rate

With this loan, your monthly payment amount won’t ever change unless you revise the loan, since the interest rate will remain constant.

Adjustable

Adjustable loans usually have a lower interest rate at the beginning and then they slowly rise over time.

Interest Only

Interest only loans require you to pay off the interest first. Then, once that is paid you will work to pay off the loan itself.

Balloon Mortgages

A balloon mortgage amortizes quickly so that all of the payments you are making won’t fully cover the loan amount. When you have completed your payments, you will still have a large amount to pay off. 

Your lender can tell you about more types of loans and which options are available to you. No matter what kind of loan you go with, it is important that you fully understand the terms.

Finding out what kind of financing you qualify for is the best way to start your search for a new home. You can find out more about mortgages and house hunting on the Christine Norcross & Partners website.

If you would like to find a Wellesley home for sale, contact Christine Norcross at 781-929-4994. You can also connect with us on Facebook for more home buying and selling tips.