Getting a mortgage is a long term commitment. This is something that has to be thought of thoroughly. This is a commitment that stays with you 10 to 15 years of your life. There are factors that have to be considered before getting a mortgage loan. It is important to know the pros and cons before driving at a decision.
There are two factors to consider. The first one has to do with you and these are the things that you need to think about before making a decision and the other one is what the lenders would consider before approving your loan.
Prior to choosing a mortgage plan, it is important that you go through your financial situation. See to it that you would know how to project if your housing needs will change in the future while you are still tied with the loan. You have to consider the length of time you want to stay in the house and the expectations that you have over your financial income.
Evaluate the level of risk that you are willing to take when making a loan. Sometimes, mortgage loans take time to close and you are going to pay fees like closing costs and the like. Also, decide on the rate of interest you are willing to pay for.
You can also choose an adjustable mortgage rate or a fixed mortgage rate.
Determine the period in which you want to keep the mortgage. Terms are 15, 20 or 30 years. A shorter term means higher monthly payments. If you are earning more, then opting for this is a good choice. Most mortgage borrowers opt to pay long term because it is easier on the pocket and lenders prefer this because they are more assured.
The factors that may affect the approval of your loan are a high credit score, your income and your outstanding credit.
Having a high credit score will improve your chances of getting approved. Having a steady income will give you plus points in securing a loan and make sure that you pay off all your outstanding credit before applying.