Buying a home is the biggest purchase for most consumers. As a student, you will most likely face this decision soon after graduation. The sooner you understand the financial process of owning a home, the better off you will be making those decisions in the future.
Mortgages are borrowed funds that have to be paid over a long period of time to facilitate you owning a piece of the American Dream. Before you embark on signing for a mortgage, you need to educate yourself on all aspects of the borrowing process.
It is critical that you remain in the driver's seat as you prepare for your budget. Decide on the loan amount you can afford to pay back, and do not rely on the pre-qualification estimate or the pre-approval amount you received from your lending institution. The housing market collapse of 2008 caused over two million American families to lose their primary residences in bankruptcy due to overextended credit lending activities to financially-trusting consumers.
Get all the facts before you embark on purchasing a home for you and your family. Start with the understanding of your budget: calculate how much you can afford in a monthly payment and a mortgage loan. Learn all the dos and don'ts as you explore the financial process of owning a home. Most importantly, steer away from first-time home-buying mistakes such as not sticking to your budget, choosing costly types of loans, skipping inspections, not evaluating your non-negotiable items, and not being financially prepared.
It is a lot easier to collect tips on what not to do, but it is more valuable to find out the practical and specific strategies in gaining the full understanding of the financial process of owning a home. We can provide you with step-by-step instructions on the financial process of owning a home, and we can equip you with the tools and ideas to make your search for your new home an enjoyable experience.
The information about mortgage has been drafted from Penn State's Financial Literacy and Wellness Center.