Mortgage holders give their best advice to newbie homebuyers

by | Dec 27, 2018 | Blog

Taking on a home mortgage is a serious commitment – one that can last the next 30 years. Before taking the plunge, it always helps to listen to those who’ve come before:  What lessons have they learned in handling a mortgage that can benefit you? recently asked homeowners to reveal the best advice they had for those getting ready to take the leap. Below, their responses: 

Keep your mortgage payment low enough that one paycheck covers the cost each month: “This might seem pretty simple,” notes one homeowner, “but I was once told not to freak out so much about the total cost of the mortgage, but to make sure that when all is said and done, I could handle most if not all of the monthly payment in one paycheck.” This guarantees you will be able to cover the payment and other monthly expenses without too much stress.

Shop for the best interest rate: Don’t accept the first quote you receive. Query many lenders until you’re satisfied you have found the lowest rate. This way, you can also determine which lender seems most trustworthy at the same time.

Lock in the interest rate for as long as possible:  Unexpected problems can delay a closing. The longer your interest rate is locked in, the less anxiety you will experience when glitches arise.

Beware of ARMs:  Adjustable rate mortgages (ARM) can seem tempting, particularly if you plan to sell the house in a few years. But again, unexpected things can occur that can change your plans. If you end up staying in the house and the ARM balloons, you can get caught with a mortgage you can’t afford.

Make extra mortgage payments when possible: If you can afford it, make extra mortgage payments from time to time. Notes one homeowner: “You would be shocked at what even one or two extra payments per year can do over the length of a loan.”

Don’t forget to save for retirement: Even if you can afford a 15-year mortgage, it’s wise to opt for a 30-year loan instead. With lower payments, you’ll have money left over to save for retirement —and you can always make extra mortgage payments to decrease the life of the loan, should a windfall come your way.


Photo by rawpixel on Unsplash

Curious about Denver real estate?

Have questions about the Denver market?