How to Save on Mortgage Costs
We all want to live debt-free lives, and Florida is no exception. It’s unfortunate that Florida house prices have not rebounded as fast as the prices of everything else in the state. However, there is hope for Florida property owners. In the face of job losses, interest rates, adjustable mortgages, and a slumping house market, some buyers are beginning to see the benefits of renting instead of owning their own homes. However, those aspiring Florida renters must keep in mind that they must make more monthly mortgage payments than if they had been paying rent. In addition to that, it may also be more economical to rent until the property is sold as having a long-term, fixed-rate mortgage is the best way to secure their financial stability.
An FHA-insured mortgage, or VA loan, may be a great way to invest in a new home. In contrast to conventional mortgage loans, these may have more relaxed credit requirements and may be easier to obtain in spite of a low credit score. With a VA loan, you pick the type of loan that you want to be based on your specific requirements.
If you are a first-time buyer, you may want to consider the FHA 203K loan. This is a mortgage loan where the down payment can be as low as 3.5% or as high as 10% of the total price of the home. For Florida renters, this may not be enough so you may wish to look into the very basic HECM (Hemocontrolled Housing Cost Benefits), where a maximum of 3.5% of the cost of the home can be included as a down payment. However, the closing costs for this type of loan will be higher than the traditional loans. For example, when you borrow the equity from your home’s value, the closing costs will be based on the purchase price of the home, the appraisal and your credit history. If you want to avoid expensive closing costs, you can pay a professional to do the loan for you.
In order to save on mortgage costs, it is advisable to find a home with an available credit limit of at least 80% of the purchase price. If the appraised value of the house is less than 80% of the purchase, you might want to try to get a secured mortgage and charge the difference to the credit card. A lender may agree to the difference and issue you a payment protection insurance based on the amount of risk you project. Taking out a loan can also be economical from the point of view of your credit. If you have never borrowed money before, getting a loan may be difficult if the amount is below $7500. If you can get a loan with a higher limit, you should accept it since this will improve your credit history within three years and give you use to borrow money again.
If you start finding it harder to obtain loans, you can also consider getting a car title loan. These are small loans that are issued almost immediately by a lender based on the value of your vehicle. The amount is based on the vehicle’s title, which you must hand over to the lender. The amount of the loan is usually between $500 and $5,000, and the repayments can be as short as 2 weeks.
The difference between a cheaper mortgage and a mortgage that has all of its perks is that the interest rate is lower. In the long term, this can be significant, but in the short term, you may save. If you want to save money, make sure to make your payments as intended, and do not leave anything to chance.
