One of the beautiful things brides dream about in addition to their weddings is owning their own home. They picture airy rooms, imagine furnishings, and envision the décor, but brides tend to skip daydreaming about the complex process of purchasing their first property. Finding your dream home can be the first serious adventure you and your fiancé embark upon after marriage, so use our advice to put yourself in the know before you make your fantasy come true.
Go shopping!
Finding your first love nest together can be incredibly romantic, but don't stop shopping once you fall in love with a house. Finding the right mortgage loan is incredibly important, and can save hours of future arguing between you and your mate. Before you start, know the difference between a fixed and adjustable mortgage rate. A fixed interest rate stays the same throughout the life of the loan -- a logical choice if you're positive you'll be living in your house for the next 30 years. However, American families don't tend to occupy the same home for decades anymore; in fact, the national average is seven years. An adjustable rate mortgage (ARM) allows you to fix the rate closer to the actual amount of time you'll live in your home whether it be 1, 3, 5, or 7 years. ARMs can be one or more percentage points lower than a fixed loan, saving you thousands of dollars in interest and allowing you to pay down the principal on your home sooner.
Spend wisely
The more money you save on your home loan, the more money you'll have to furnish and decorate. Make sure you ask every potential lender what type of fees they charge. Many lenders charge an application fee to cover the admin costs of processing your application, and once you've paid the fee, it typically belongs to the lender (whether you decide to get your loan from them or not). Find out who charges an application fee, how much they charge, and whether the fee is refundable.
A loan origination fee is what your chosen lender charges for actually processing the loan. The typical fee is based on "points," or 1 percent of the total mortgage amount. Be sure to ask a potential lender how many points their loan origination fee is based upon, and compare it to your other inquiries.
Closing costs are the fees generated once the property changes hands, and they vary by the county you're in as well as by lender. You should inquire about what individual fees will be included in your closing costs, and the rate a potential lender plans to charge you for each. Keep in mind that closing costs typically come in at 3-6 percent of the total loan, and fees that cannot be avoided include those for a title search, title insurance, deed recording, property taxes, and appraisal. Depending on the lender you choose, you may be able to avoid an application fee, commitment fee, document prep fee, funding fee, mortgage broker fee, processing fee, tax service fee, and underwriting fee. Again, that is all money to spend on the fun stuff - furniture and design elements!
Be Informed
You put a lot of research and planning into your wedding, so don't give planning for your future home short shrift. There are a variety of additional questions you can ask in order to get the best interest rate possible. If a lender advertises a fantastic rate, make sure that it's one that you can qualify for -- the rate may require criteria that the average applicant can't possibly meet. You should also inquire about pre-payment penalties that a lender may charge should you pay off your loan sooner than planned. Pre-payment penalties can be enormous and offset the prime interest rate you secured. Be prepared to invest time into finding a lender and mortgage that is right for you, and don't get discouraged. With the right knowledge, patience, and mortgage loan, owning a home is a bridal dream you can turn into reality.