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Why You Should Get Pre-Approved for a Mortgage Loan

When determining how much you can afford to pay for your home, you must consider your down payment amount, monthly expenses, credit rating, and income. Using this information, you can determine a comfortable price range. Until you know how much you can pay toward a mortgage each month, you can't effectively search for a home. You must also calculate your debt-to-income ratio to ensure that you are within acceptable limits.

When shopping for a loan, you must consider the interest rate and loan term. The higher the interest rate, the more money you will pay each month. Interest rates may be fixed or adjustable. Adjustable interest rates can change, while fixed interest rates remain the same. Most mortgages are either 15 years or 30 years long. A 30-year mortgage involves a lower monthly payment than a 15-year mortgage for the same amount, but the total amount paid in interest will be greater.

Home Shopping

When you make an offer on a home, you won't typically offer the seller's asking price. However, it's important to make sure that your offer isn't so low that the seller will be insulted. In many cases, the seller will issue a counter-offer that falls somewhere between your initial offer and the selling price, so keep this in mind when you make your first offer. Some sellers may be willing to include appliances if you will agree to pay a slightly higher price for the home.

Purchasing a home is a big decision, especially if you are a first time buyer. The process is intimidating and lengthy. However, it can also be exciting if you feel comfortable with your decisions along the way. Preparing yourself for all of the steps involved in purchasing a home can help ease any anxiety you may have. To learn more about buying your first home, consult the tips above.