Most individuals looking to purchase a home start preparing well before they ever meet with a real estate agent. Buying a home is not something most people can do on a whim. It takes time to achieve the financial preparations that come along with buying and maintaining a new home. Most individuals begin the process by saving funds for a down payment while looking to clean up their credit score. The higher your credit score is the better your chances at qualifying for a lower interest rate mortgage. Mortgage preapproval is another financial preparation that needs to be secured on the road to homeownership.

A mortgage preapproval gives you a comfortable range in which to start looking for homes. This preapproval amount is the amount that lenders feel comfortable with you borrowing given your income to debt ratio. Just because you are preapproved for a certain amount does not mean that this is what you must spend on your new home. If you are looking at homes more than what you are preapproved for you will need to make up the difference with a large down payment.

As a home buyer it is up to you on what you feel comfortable spending on a new home. If you feel the amount you are preapproved for is too high consider looking for homes in a price range you feel more comfortable with. Most sellers require a preapproval when seriously considering offers. A preapproval is a guarantee that you will be able to secure funds to purchase their home. Sellers looking to commit to an offer want a sense of security and an offer with a preapproval stands above those without one.

When it comes to obtaining a mortgage there are two basic options to consider: a fixed interest rate mortgage and an adjustable rate mortgage. Your mortgage broker will be able to assist you in determining which option is best given your financial situation.

In general terms a fixed interest rate mortgage is a home loan in which the interest rate remains constant over the life span of the loan. The payment is spilt into equal payment over the course of ten, fifteen, twenty or thirty years. The advantage of this type of loan is that you know exactly what you owe each month. The main disadvantage is locking in a higher rate than what is offered later on down the road. In order to take advantage of the lower rate you would need to refinance your current mortgage which has fees associated with it.

An adjustable rate mortgage sports a variable interest rate that allows lenders to raise or lower rate as market conditions change. Your payment will go up or down according to the changes made by the lender. This flexibility allows you to take advantage of lower market rates without the fees involved in refinancing. The one disadvantage of course comes into play if the market conditions take a turn and rates increase.

When looking into the financial preparations before purchasing a home it is advisable to meet with a mortgage broker. They will help prepare you in the financial aspects of buying a home. Mortgage brokers layout whether now is a financially good time for you to start looking to buy a home or not before you have wasted valuable time searching for a home.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Applying For A Mortgage As A Recent College Graduate

Being a recent college graduate can be fairly overwhelming. It is a time where you are paving a new path for yourself; including starting a new career path, buying your first home and taking on the payments of your more real than ever debt. You are faced with many big decisions, some more daunting than others. This does not have to be the case when looking to buy your first home. Once you understand what type of home you can afford the purchase of a home can be in the grasps of most recent college graduates.

The first thing you must consider when buying your first home is the amount of money that you have coming in each month in comparison to the amount of money you have going out. This calculation is your debt to income ratio. Once you have a grasp on this it is time to meet with a mortgage broker.

During the initial meeting with a mortgage broker or lender a professional will discuss with you the differences between buying a home in case verse using a mortgage to purchase a home. In order to receive a mortgage preapproval your credit history will be scrutinized. This allows lenders to make an educated analysis on your risk. They need to determine if you have established a history of good credit as this will help them determine an amount they can lend comfortably. Mortgage companies want to ensure that their investments will be paid back. This is what your credit history tells them about you.

When you are looking to buy your home, especially as a new college graduate you must consider your future both near and distant. Are you looking to start a family soon? Are you looking to return to graduate school? What exactly does your future look like? Will you be acquiring additional expenses without additional income? These are important questions to answer before deciding in actuality what you can comfortably afford in a new home.

If you are likely to move or relocate with your company does it make sense to purchase a home right now? A lender can discuss current market conditions while a real estate agent can help target homes within your budget that are likely to sell quickly in the future if need be. A major consideration is if you will get your investment plus equity if you need to sell within five years of your initial purchase.

Buying your first home is an exhilarating experience. As a recent graduate many of these firsts can be overwhelming; buying a home doesn’t have to be. Take your time making decisions. There is never a rush when it comes to taking on any size financial commitment.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.