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    Mortgage 101 – The Basics of Getting a Mortgage

    So you’re buying your first house, but you’re not sure of everything you are going to have to cover. Here are a few basic tips to get you started when you are buying a new home.

    Know Your Credit Score and How Much You Want to Spend

    Right now you are doing research on the steps you need to take to make your dream a reality. The first thing you need to do is check your credit score. Having a good credit score will get you to the table, but having a great credit score will put the power in your hands. Lenders love a buyer who has shown a responsible credit history and has been rewarded with a great score. This lets them know that you are serious, and plan on taking this endeavor seriously, which is a good thing.

    But if you have a few blemishes, never fear. There may not be as many lenders fighting over you, but at least you will be at the table. And knowing the hurdles is advantageous, so find out your credit score and decide how much you want to spend on a house and do some math.

    Decide On the Type of Loan That Suits Your Finances and the Amount You Need

    One of the most popular home-buying options is the 30-year fixed-rate amortized loan, which is important to people who want a stable payment and plan on staying in their home – most likely – for the duration of the loan. Getting a good interest rate on a 30-year fixed amortized loan is imperative, so be sure you do your homework to ensure you get the best rate possible in that situation.

    But people who are interested in moving within the next 10 years may go with an adjustable rate mortgage (ARM). The choices are generally five, seven or 10 years, where during that period you have a fixed-rate on your mortgage and interest payments. Then your payment will either go up or down once a year according to the index. This is for the buyer that would like to save money on their interest payments instead of having a fixed rate for 30 years.

    Ways Around the Traditional Mortgage Hang-Ups

    Is your credit score lower than desired to buy a house? You may not get the lowest interest rate, but you’re still in the game. Having a low credit score isn’t going to kill your deal, though you may end up paying more interest, depending on your lender. Employment history is also important, but not a deal-breaker. Two years employment shows that you can commit to a long-term goal. And if you have a good income, you may be able to pony up a bigger down payment and secure your dream home.

    So if you’re looking to buy, sell or move, contact RJ Homes and talk to a realtor today.

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