Are you about to use a mortgage calculator before buying a home? Well, it is a wise decision. A mortgage calculator is an online tool that will help you to know how much house you can afford based on certain things, including down payment, credit score, mortgage rate, etc.
But before you use a mortgage calculator Houston, make sure not to use these mistakes –
Not knowing your credit score
Not understating what your credit score is a big mortgage calculation mistake, as the credit score impacts the interest rate you are likely to receive on your home loan. And that interest rate can make a big difference by saving your dollars that you could otherwise spend over the life of the loan. It is tempting to give yourself a great interest rate when using a mortgage calculator in order to estimate your monthly payment. However, you may not be able to secure a 4% rate if your credit score is not up-to-the-mark as your estimate could be different from reality. Take measures to know your credit score and understand whether it is good or not so. If your score is not good, then step back from your home-buying process and work to boost your number first. It can help you to save a lot in the long run.
Failing to compare
There is another mortgage calculation mistake that is tied to your interest rate. – fail to compare to find the right lender. All mortgage lenders will not give you the same terms on a loan. It is worth the effort to find out if you could secure a better interest rate with one lender over another. Before you opt for a lender, ask for quotes from different lenders. Plan to ask for quotes from each lender within the same week. If you gather a number of quotes within a 14-day window, they will all count as an inquiry on your credit score. Once you get the quotes, compare it when using an online mortgage calculator.
Not learning about the process earlier
To be a savvy homebuyer, who makes most of their money and avoids costly mistakes, it is vital that you understand the mortgage process from the very beginning to finish. Start by reading up on the mortgage industry. Create a list of questions that you need answers to a trusted professional. You can talk to a real estate agent, a mortgage lender or an experienced professional belong to this industry. Look for one who can work as your fiduciary to get your financial questions answered. Taking the time to inform yourself first is the ideal investment you can make in this entire process.
So, save yourself from these mistakes before using an online mortgage calculator. To go that extra mile, you can use a couple of online calculators in place of only one and come to a decision based on their results.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.