We are not sure that something positive crosses our minds when someone mentions the word mortgage. The biggest problem when it comes to this topic is the fact that most people are not entirely familiar with this whole process. Applying for it is quite complicated, and you need to do research and comprehend certain things if you want to accomplish a good outcome. This is especially important for those who have never purchased a house before.
Now, there are so many things that you must take regarding mortgage (like interest rates, paperwork, and others) that might discourage you, but on the other hand, there are some facts that might give you a more optimistic perspective. We’re about to list some!
Reasons to Change Your Mind
Mortgage Rates Low
According to some information given by economists, people can look forward to low mortgage rates during the highest peaks when it comes to house hunting. It usually occurs during the spring and summer.
Why is this beneficial for you? Well, this means that your monthly payments will become more attainable. Furthermore, the number of mortgage applications to buy a house have started rising.
The Mortgage Bankers Association claims that they are up approximately 40 percent from April this year and are down around 1.5 percent in comparison to 2019. This sounds quite promising!
Good to Have a Credit Score
This is probably a piece of information that will surprise many. Although people think that having no credit score after bankruptcy (or in any other case) is better than having a low one, that’s not entirely true. On the contrary!
Why is that? For instance, it is understandable that most individuals love to pay in cash whenever they are purchasing something to avoid potential splurging, most lenders want the proof that you have paid all your bills on time, and in this scenario, they will have no record of it!
That’s why it is important to give them some credit history, which comes in the shape of a credit report. Now, potential mortgage lenders will get a certain idea of you, a positive one, and they will perceive you as someone who is responsible and takes things seriously! That is a crucial thing for anyone who wants to take the loan!
Feel Free to Shop Around
Those people who love to spend some time shopping, we have good news for you! Many believe that applying for new credit is going to be visible on their credit report and that it could potentially jeopardize their credit score.
Well, while that may be the truth, what you probably didn’t know is that there is also one unique provision that is placed inside the FICO scoring formula that enables you to shop without obsessing over its impact on your credit.
When it comes to auto loans or mortgages, if you apply during a normal shopping period, it will be perceived as only one credit application for scoring purposes. This usually means (shopping period) fourteen or forty-five days. It all depends on the type of the FICO model your lender is using.
Therefore, to avoid any potentially negative situations, it is advisable to have that shopping spree within a two-week time frame.
More Interesting Facts…
A Good Way to Shave Years Off Your Loan
This might come as surprising information, but one of the best ways to reduce your debt fast and, at the same time, add additional payments to build equity is by paying 100 dollars each month.
If you do this, you will be able to shave five years off your loan! The more money you pay every month, the better!
Friday is Your Day
Another interesting fact is coming your way. Namely, according to some research, if you want to increase your chances when it comes to selling your home, the best day to do it is on Friday!
As it turns out, people are generally better on that day, probably because of the upcoming weekend; therefore, a lot of them will take some time to go and visit your real estate. Interestingly, they are twenty percent happier!
Know Your Loan’s APR Rate
One of the things regarding this topic that is good to get familiar with is concerning your loan’s APR rate. Each loan has an interest rate, which is good because then you’ll be able to compare your loans.
Therefore, it is recommendable to compare your annual percentage rate whenever you decide to shop for a solid mortgage. More importantly, the APR will showcase the real cost of your loan.
Based on this information, it is easy to conclude that the situation concerning mortgage is not as scary and dreadful as some of you may think. According to some statistics, many home buyers are even going back to the real estate market. That only shows that the future is brighter than it seems.