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My first mortgage?
This is my first time getting a mortgage. I have no clue what to even look for. I know that I need to shop around and get quotes… But I HAVE NO IDEA WHAT TO LOOK FOR! If anyone else out there has shooped around, can you please let me know exactly what I need to know about getting a mortgage before I call a bunch of places and sound like an idiot…and then they might take advantage of me. Please help.
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First take a deep breath. Then, marshal your resources. Do you have a relative that is financially sophisticated? Use them as your sounding board.
If you haven’t signed for the property yet, or maybe even if you have, find and retain a Real Estate attorney that you can afford. It’s a GIANT mistake to get into a real estate deal without a liar … err, I mean lawyer. Don’t use the seller’s. Don’t use the mortgage company’s. Have your own. When I bought my first house in 1975, that single piece of advice from my Mom saved me about 15k$. My lawyer said “my client isn’t responsible for that” about a dozen times. Without him, I’d have said “yeah whatever”.
Then you need an accountant. Same deal. Cheaper and easier. Have them review whatever you are going to sign up for. Promise you’ll let them do your taxes and I bet they’ll come dirt cheap. Shop around. I SHOULD have done that with my second house and I’d have saved a bunch of bucks.
Then you need a “home inspector”. Licensed, certified, insured, with lots of references. This is no guarantee of being problem free, BUT, when you’re in front of Judge Judy you can saw “I didn’t know about houses so I hired him! Pointing accusingly to the defendant.) It’s all about changing unknown risks into modest upfront costs.
Find or found, the house of your dreams.
Now you are ready to consider mortgages.
You can get them from a bank, brokerage, mortgage broker, credit union, and private lenders. Start with a credit union. (IMHO you’ll we get the most honest deal there.) Find a rich relative with a brokerage account and as if they can get you a deal. (I have a Merrill account and my relative could have gotten a mortgage with them with my “sponsorship” — not cosigning — at an attractive rate. Dumb, but they wanted to do it on their own. I think they made a mistake. But not my problem.)!
Look at the type (Suggest you want fixed), term (15 if you can afford it), points (extra interest cost), fees (Yuck!), and gimmicks (i.e., credit life insurance; buyer protection).
Your lawyer, accountant, and home inspector can tell you if you are getting a “fair deal”. No balloons, teaser aprs, negative amortizations, interest onlys, nothing tricky.
Your family member, or Yahoo answerer, can tell you if you can afford it. No more than 20% of your salary in mortgage payments. OK 25%, but that means no eating out.
Hope this helps, and you’re happy with your new mortgage, let me know how it turns out,
fjohn
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