Being a first-time home buyer it’s an unprecedented event in our life. It is not easy to afford a property, but luckily for you, mortgage are here to help you.
Here at Oxford Funding, we’ll give you all the information you need related to mortgage rates, payments, and basically everything you need to know about them.
We understand that owning a home is one of the most common dreams of Americans. For most people, the best way to achieve this goal is by getting a mortgage.
Becoming a homeowner is not impossible, but it is fundamental for you to understand what mortgages are and how they work before getting into one. That being said, after reading this blog post, you’ll understand:
- What are mortgages and who can get one.
- How does a mortgage loan work?
- How much mortgage you can afford.
- Mortgage rates nowadays.
- What is the mortgage relief program 2021.
A mortgage isn’t more than a type of loan used to buy a new home. They are also commonly called “mortgage loans,” but basically, the concept is as simple as that.
If you don’t have enough cash to pay for a property upfront, then a mortgage is your best chance actually to get a new home.
Most people who buy a home do it with the help of a mortgage. Of course, it is very important to qualify for the loan in order to get the financing we are looking for.
Therefore, it is essential to have a reliable and stable source of income to get a mortgage.
Mortgages represent a significant risk for lending companies due to the high amount of money related to the operation.
So, someone looking to get a loan must have a decent credit score and a relatively low debt-to-income ratio.
The mortgage loan process is usually divided into three stages:
- Get approved and find your home: initial approval is one of the most important steps when getting a loan. Getting approved upfront will give you a bigger picture regarding the houses you can actually purchase with your budget.
- Shop for your new property: once you get approved, it is time to look for homes! Contact real estate agents and negotiate the prices of your possible options.
- Get final approval and close on your loan: the lender will verify every detail of the mortgage and give the final approval if everything is okay. Once everything is done, your loan will be closed and you’ll take ownership of your new home.
Obviously, mortgage payments are made with interest over a period of many years. Legally, you won’t fully own the property until the mortgage is fully paid off.
Now that we have established what a mortgage is, it is time to understand how much mortgage payment we can actually afford.
Yes, we all want that big, beautiful home in that perfect location, but keep in mind that is a big loan, maybe even the biggest of your life.
That’s why we, like home buyers, must comprehend that having a certain level of comfort is necessary when it comes to monthly mortgage payments.
It is fundamental to balance our monthly debts, daily expenses, and emergencies with our household income.
You might have that steady income for now, but what if you lose it for two months? Will you still be able to pay back on time?
That’s why you might be eligible for a, let’s say, 200,000 USD mortgage, but, in the end, think about it: do you really need to spend it all?
Is there a property that costs half of that and still covers all your present and future needs?
Consider all the possible scenarios before deciding how much mortgage you can truly afford.
It is not a secret to anyone that the Covid-19 pandemic brought terrible consequences to our country’s economy.
In the case of mortgages, the interest rate is mainly determined by the current market and, naturally, by the level of risk related to lending companies. It is not possible to control the interest rates, but we can take a look at the present to understand what’s really happening.
Right now, in June 2021, mortgage rates are still below 3%. These low rates create competition among homebuyers while helping homeowners to refinance their existing loans.
It is not normal to have rates this low, but this is a direct consequence of the pandemic. In fact, exactly a year ago, when the rates hit 2.98%, we have never seen anything like that in our country for the last 50 years.
Then again, it is not up to us the current interest rates on the market, but knowing them might be the key to understand if it is good to get a loan at a particular moment or not.
Getting a mortgage loan and not being able to pay it due to circumstances out of your control, like a pandemic, is a big problem for most of us.
Luckily, our government understood that which led them to create the COVID-19 Mortgage Relief program.
This program helps Americans to replace their existing loan with a new one with lower interest rates and, of course, more affordable payments.
Our country’s economy is slowly recovering, but there’s still a long way to go.
Nonetheless, it is clear now that mortgages can be a great ally when pursuing our dreams of finally getting a new home.
Remember that it is really important to understand your needs before deciding to get a loan finally.
This way, you will be able to get the homes of your dreams while repaying a comfortable and affordable loan.
Also, do your own research of the market and keep yourself constantly educated in order to find the best lending deals for you.