So you’ve found the home of your dreams, and now the only thing keeping you from your new life is signing for a mortgage to finance it. Simple enough, right? Not quite. Mortgages are complex legal documents that are easy to misread or misinterpret, so there are a few things you should know about your home loan before putting the pen to the paper. Here are a few:
1) Does the house come with liens? If you’re buying a foreclosure, there’s a good chance that some liens will be attached to the title and mortgage. Liens are unpaid fees like insurance or back taxes that the last owner didn’t pay. These fees might not show up on the sticker price, but they’ll transfer to you all the same, so make sure you’re prepared to take on the costs.
2) What’s your interest rate? Your interest rate is the most important thing to consider before signing on the dotted line. Different types of lenders will offer different levels of interest, but you should make sure that yours is a fixed, non-adjustable rate in the single digits. If you don’t, you could end up paying tens of thousands of dollars more than the sticker price.
3) Can your lender sell your mortgage? Although lenders usually sell off mortgages only as a last ditch effort to save their agencies, you should still find out whether yours is eligible for resale. If your mortgage gets pawned off to another broker, you could find yourself facing interest hikes and other unwanted costs.
4) What’s the fine print say? When it comes to mortgages and home loans, there’s always fine print. As a future homeowner and titleholder, it’s your responsibility to familiarize yourself with every condition, catch and clause of your mortgage. Not doing so could mean a lot of trouble down the road for you and your real estate investment.
Signing for a mortgage doesn’t have to be hard, but it shouldn’t be taken lightly, either. Before you sign on the dotted line, ask your broker questions and read through all of the paperwork. That way, you can ensure that your home will be a happy one for years to come.