When a person is in a place financially to purchase a home, it can be one of the most exciting times of their life. Most people work and save for years so that they can reach their goal of home ownership. If you are one of these people and are ready to purchase a home, you should first know a few tips about looking into California mortgage companies.
Figure Out What You Can Afford
Before you start looking into mortgage rates and looking at houses, you should figure out how much you can afford to pay for your house. You don't want to take on too much, only to find that you cannot afford the mortgage payments, and it goes into foreclosure. To start, you should compare your income to your debt. Consider all of your monthly bills and costs, and subtract that from your income. That is the amount of money that you have to work with. It is important to consider more than just your mortgage payment. When you own your own home, you would need to consider the cost of homeowner's insurance, property taxes, and water and sewer bills, which are usually included in the rent when you live in an apartment. When you have an idea of what you can afford, you will know what to ask the mortgage company for.
Save For a Down Payment
It is a good idea to save the money for your down payment before you start contacting California mortgage companies. If you are working with a lender who requires you to put 3.5 percent down, it would make saving easier, however, you would not have any sizable equity right after you purchase the home. If you save 20 percent of the cost of the home, it allows you to have lower monthly payments and you would have a great deal of equity to work with.
Check Your Credit Report
Before you look into mortgages, you should review your credit report. The higher your credit score, the lower the interest rate on your mortgage would be. The first thing that you should do is make sure that there are no mistakes on your credit report. If there are, you should have the problems corrected before you apply for the mortgage. If you look at your credit score, and it is low, you may want to wait to purchase a home until you can get your credit score up a bit. Waiting can end up saving you thousands of dollars.
There are many people who will go to their bank and apply for a mortgage. If the bank is offering the lowest rates, this is a good decision. However, your bank won't always have the best rate. It is best to shop around for various lenders, to find someone who will give you the best jumbo loans possible. A lender who offers the lowest rate can save you thousands of dollars in interest payments each year.
Buying a home is a huge step. Before you start looking into mortgage companies, you should make sure that you have everything in order first. Being properly prepared can be a huge money saver when you sign your loan papers.