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If you’re a first-time homebuyer, then your head may be swimming due to the complexities of the mortgage process. While it’s easy to understand your unfamiliarity having never had to go through ay of this before, it is at the same time vital that you educate yourself to the details of buying and owning a home before you make such a huge financial commitment. After all, “swimming” is something that should be avoided when it comes to mortgages, due to the potentially frightening associations that it has to homeownership.

What Does it Mean to Be “Underwater”?

You’ve likely heard of people being “underwater” with their homes, yet may not fully understand what that actually means. If a homeowner is underwater, it means that he or she owes more on the home that what it is actually worth. If you end up in this scenario, you could end up having to deal with a number of problems. For example, if you’d like to refinance, your options could be extremely limited. That’s because few lenders may be willing to offer you great rates given the current market value of your home.  Plus, if you need to move due to a work relocation or a loss of income, you could end up still owing money on your home even after its sale.

How You Can Avoid It

Yet going underwater with your mortgage isn’t unavoidable. Listed below are  few things you can do to ensure this doesn’t happen to you:

  • Save up for a large down payment: The less you owe on your home the better. Even if it means renting for longer than you’d like, the added equity will be worth it.
  • Don’t overpay for your home: Don’t get caught in a bidding war that forces you to pay more, no matter how much you may love the property.
  • Make extra payments when possible: By paying even as little as one extra mortgage payment per year, you build up more equity while also saving on interest.

While learning as much as you can about homeownership is important, no one expects you to become a mortgage expert overnight. Fortunately, you don’t have to be. With the assistance of a well-qualified mortgage broker like the Altius Mortgage Group that offers easy access to both services and advice, you’ll have the resources needed to ensure that you’re well-informed before making any major decisions.

 

August 1, 2016

Avoid Going Underwater

If you’re a first-time homebuyer, then your head may be swimming due to the complexities of the mortgage process. While it’s easy to understand your unfamiliarity having never had to go through ay of this before, it is at the same time vital that you educate yourself to the details Read More
July 15, 2016

Why Does the Mortgage Interest Rate Fluctuate?

It can seem like the interest rates on your mortgage are determined by chance or some otherworldly power, but this is simply untrue. Analysts work hard to determine the cost of borrowing, and that information makes the services your mortgage company offers possible.  So what do mortgage companies look at Read More
July 1, 2016

Profitable Compromises

Not everyone is able to afford their dream home starting out. You may have to be to cut back now so that you can have what you really want later on. The services of a good mortgage broker are there to help you decide what your most profitable compromises are. Read More
June 28, 2016

Is This the Year You Should Refinance?

  By now you have probably heard about the historically low interest rates that have been in the housing market for the last few years, but do you know if you should be taking advantage of these rates? Many mortgage lenders will advertise for anyone and everyone to come and Read More
June 2, 2016

Calculating How Much You Can Afford in a Home

When most people start their home buying process, they begin in what they think is the best place: searching current home listings for the right property to purchase. Finding that perfect home in the ideal neighborhood is the goal, and certainly the fun part of home shopping, but if you Read More