As a first-time homebuyer, you may find yourself overwhelmed by all the things you need to know when buying a home.
That’s where Homebridge comes in. We’re on a mission to make the homebuying process easy and transparent. We’re here to walk you through the process step-by-step, starting with understanding what a mortgage is.
What is a Mortgage?
In simple terms, a mortgage is money you borrow from a bank or independent lender to help pay for the purchase of a home or other piece of real estate. As you can imagine coming up with $200,000 in cash for a new home can be difficult for most people. A mortgage allows you to finance your new home dreams and pay back that loan in monthly installments.
Even if you’re able to pay in cash, often it’s more beneficial to allocate that money elsewhere, like saving for retirement or paying off debt. We recommend consulting your accountant or other financial advisor for their advice in this area.
What Is Included in your Monthly Mortgage Payment?
There are several items included in your monthly mortgage payment, outside of Principal and Interest on the loan, including:
- Closing costs
- Homeowners Insurance
- Private Mortgage Insurance (depending on your loan program)
We’ll go into each of these topics as you get further into your journey, but don’t fret – your Mortgage Loan Originator will help you assess these costs in full before jumping into your mortgage financing.
Does Renting Make More Sense?
If you’re trying to figure out to continue renting or if you should buy a home – take a look at this video we made. It will clarify some commonly asked questions that may be specific to your situation.
Questions to Ask When You’re Considering Buying a Home
Most people will decide to buy a home sometime in the future. According to a Nerd Wallet Survey, 75% of Americans say that buying a home is a priority and 32% of Americans plan on purchasing a home in the next 5 years.
So how do you know when the time is right? Here are some factors and questions to ask yourself to know if now is the most opportune time!
- Does your job require you to change locations often?
- Am I comfortable paying a certain amount for a home?
- Do you feel financially ready?
- Do you plan on living in the area for 5 years or more?
- Do you have money saved up specifically for a down payment on a home?
- Do you have enough money coming in monthly to justify the extra expense of a mortgage?
If you answered “yes” to all these questions, it looks like you’re ready to dive right in!
We recommend you learn how mortgages work. Utilize your local Homebridge Mortgage Loan Originator (MLO) as a resource. They will make sure all your first-time homebuying questions are answered.
We also encourage you to continue down our series of blog posts for the first-time homebuyer! Don’t guess at how much home you can afford – read more here.