Wondering how to get a mortgage, but scared to death you’ll mess things up? To be sure, buying a house is exciting, but there’s a fine line between excitement and pure, unadulterated fear.
This emotional rollercoaster can be partly explained by the fact that money represents much more than just currency. Consciously or not, you may equate money with power or safety. As such, funneling a large portion of your dough toward a home can be nerve-rattling.
People put a tremendous amount of stress on themselves to not mess up. So in case you find yourself panicking, here are the Jedi-like mind tricks that can help you navigate the scarier parts of the mortgage and home buying process.
Educate Yourself on How to Get a Mortgage
The level of financial literacy in America is dismal. Money is often too taboo to be spoken about in the home, and isn’t well-taught in school either.
That doesn’t absolve you of fiscal responsibility. It means you’re going to have to work harder to understand the info that you need when it comes time to buy a home.
Take baby steps – like checking out a home affordability calculator that crunches the numbers instantly on your income and debts and estimates what price house you can afford.
Once you can do that without hyperventilating, you can research the more nuanced idea of debt-to-income ration and making sure yours is no more than 36%.
Learn from Other Home Buyers
Friends or family members who’ve purchased a property likely felt the same anxiety you’re feeling. They can be extremely helpful by sharing their own experience and answering any questions you may have.
You know your Uncle Fred who managed to buy a great home after bankruptcy? Your worrywart friend who’s already on her third home? Now is a good time to ask them to share their secret sauce.
Understanding the Basics of a Mortgage
Before you make open houses a hobby, study up on the basics of applying for a mortgage, making a payment, and some of the costs associated with being a homeowner. Ever heard of private mortgage insurance? Know about closing costs?
Don’t go nuts but get familiar with some of the key terms and major steps. Consider it exposure therapy.
Talk to a Mortgage Lender
Before you ever set foot in a house, you should meet with a mortgage lender. This pro can walk you through the steps you need to take to get ready for the home-buying process IRL. For one, they can tell you exactly how much money you’d be pre-approved for, so you can shop for houses you know you can afford.
After you have your financial affairs in order, you’ll be able to enjoy the process of purchasing a new home without fear and anxiety.
Find Professionals You Trust
Sometimes it’s hard to entrust your financial information to strangers, even if they’re the ones willing to loan you the money you need to buy a place. As such, it’s essential that you shop around for a mortgage – not only to find a professional you click with but also to ensure you get the very best interest rate, which can vary from lender to lender. The difference of even a quarter of a percentage point could save you thousands throughout the life of your loan. Remember, although you’re borrowing money from them, they’re still working for you.
As such, all home buyers should meet with at least three lenders and compare what they have to offer, or meet with a mortgage broker who can survey all the options on your behalf. Same goes with finding a trustworthy Real Estate Agent who can help you find a home that suits your needs.
Stay Focused on the Numbers That Count
Getting a mortgage is about more than buying a house, it’s having access to a home, a place to live, a place to raise your family or retire, a place that will bring memories for years. Of course, seeing the amount of your entire mortgage on paper may give you sticker shock. You wouldn’t be the first or the last, prospective buyer to panic or to wonder “How an I ever going to pay that back?”
Breathe. Choose a more accurate number to fixate on: your monthly payment.
As long as you’re comfortable with that, the home buying process will be easier to visualize. Also trust that, in general, the money you pour into that mortgage every month helps increase your home equity, which means that over time, this home becomes officially yours with no lender lording over. In other word, you have nothing to fear.
