By Joe Puthur - Daily News
It's a common scenario for young married couples.
They start out renting, maybe an apartment or a small house, but after a few years they decide it's past time to purchase their first house and put the rental life behind them.
But they hesitate. They keep making excuses for not moving forward with a home purchase and start building some equity, and personal wealth, instead of dishing out money every month with nothing to show for it.
For whatever reason, it seems that a lot of people have become content to live as renters, even though over the long haul that's not the best financial move for them.
Perhaps they are misinformed, they just don't realize the mortgage options that are available to them or they see the whole home-buying process as a daunting proposition.
So here is some insight to help first-time home owners find the right mortgage:
The best mortgage option is not always about rate.
Many loans come with advantages such as working in the cost of planned renovations — like adding a bathroom or modernizing a kitchen — into the loan. When shopping for a loan, do not just look at the rate as the bottom line; find out what types of perks different loans offer.
Your occupation might get you a better mortgage.
Lenders have programs with discounted closing rates available for teachers, doctors, firefighters, police officers and those who are self-employed. Make sure you ask your lender if there are programs like this available for your profession.
Veterans should make the most of government incentives.
VA loans are available to veterans of the U.S. military, current service members or former military spouses who are not remarried.
The advantages of a VA loan when compared to traditional loans include: No down-payment for qualified buyers, easier qualification process, better interest rates and no requirements to purchase Private Mortgage Insurance.
A VA loan isn't controlled by Veterans Affairs, it's only guaranteed by the VA, meaning those qualified for the loans have a number of options when it comes to lending institutions.
Consider your home as the most important investment you'll ever make.
Every month that you make a mortgage payment you build equity, which is the portion of the property that you actually own, versus what you still owe. As time goes on, your equity goes up and you can leverage the value to provide college funding, access financial support for unexpected emergencies or even purchase an investment property.
Your equity also provides retirement security. As a long-term investment, homes generally appreciate in value, providing a profit when you decide to sell.
It is not complicated to escape the rental trap, own the perfect home and start building equity toward a better future. The perfect home is not only where people will make memories, it is a key contributor for growing a family's wealth and financial security over time.
Joe Puthur, president of Mortgage Coach, has been a leader in technology for the last 15 years. Puthur was the founder and former CEO of Lasso Technologies, a start-up that pioneered bringing Loan Origination Software online. In 2005, Ellie Mae acquired Lasso Technologies to create Encompass Anywhere, the largest SaaS offered Loan Origination Software. Puthur has been selected multiple times among the "40 Most Influential Leaders in the Mortgage Industry Under 40" by Mortgage Professional magazine.
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