Will they sell your mortgage? Some lenders will hold your mortgage in-house, while others will sell it to another lender after a time. If you can get your mortgage held locally and have a job with direct deposit, you have the option to set up a bank account and have part of your paycheck paid directly into an account from which the mortgage payment will be deducted. This provides you with the following benefits:
- If you’re paid twice a month or bi-weekly, your mortgage payment can be withdrawn in two smaller payments rather than one large one.
- For those who want to pay down the principal early, you can set up the payment to “strip” or pull all the money out of the account and make a small additional payment each month.
Does the bank require 20% down? If you have that much to put down, it may be tempting to do so. However, if you can make a smaller down payment and hold onto additional cash for a year or two, that money can help with any unexpected repairs. It’s nice to think that nothing will go wrong, but even brand new houses can have problems.
Do they offer commercial loans? If you’re just starting out, it’s a good idea to consider purchasing a duplex and living in one half of it. It may not be your ideal brand new first home, but it’s one of the only ways to get your neighbor to pay your house payment.
Are the rates fixed or flexible? When you’re starting out, it’s a very good idea to try to get a loan with a fixed rate. While the prime rate is currently quite low, that’s no promise that it won’t change. It’s tempting to think you can refinance if the rate changes, but if your credit rating changes, you may be stuck with a very expensive mortgage until you can refinance.
Is your loan an interest only with a balloon? There are points at which these loans make business sense, but if you plan to stay in the house long term, the balloon loan is not a good vehicle.
Are You Thinking of Buying a Home in Dubois County?
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