The truth is that in today’s downsizing, outsourcing economy, not only are raises not guaranteed, but neither is job security. Putting yourself in the uncomfortable situation of barely being able to make your monthly mortgage payment can spell trouble. In that type of a financial situation you probably will not be able to set aside any money for those unexpected events that hit everyone. Expecting a sizable raise or bonus that never comes forces you to live off credit cards, which have other financial issues.
If you are a first-time home buyer you probably do not really understand that once you own a home your income will not go as far as you expect it too. Homes have their own expenses such as high utility bills, maintenance, repairs, increases in real estate taxes, etc.
When shopping for a mortgage loan, ask the lender:
• its opinion of which type of loan is best for you and why;
• what the interest rate and the annual percentage rate are;
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• for a list of all the costs you will incur in obtaining the loan;
• if the lender will guarantee that the amounts listed on the good faith estimate that it will provide you three days after the loan application will still be accurate at closing;
• if the lender will lock a loan interest rate, when will that happen, and how long is the lock for;
• if there is a prepayment penalty on the loan offered;
• if the lender is able to write VA or FHA loans; and,
• how much time the entire process is going to take and how long it will take to find out if you are approved for the loan.