Chicago 1st Time Home Buying Tips
Get pre-approved before you look for your new home. This is the easiest and probably most important thing you can do to help you if you are a Chicago first time home buyer. Pre-approval makes it easy to know how much you can spend, and will therefore help you know what sort of house to look for.
There is no better peace of mind when looking for a home than to have a pre-approval. The best thing about pre-approval is that it doesn’t cost anything and you aren’t obligated in any way. Your local lending institution can give you a written pre-approval with no obligation on your part. When you are pre-approved you know how large a mortgage you can get based on your ability to make payments up to a certain level. That’s like having money in the bank.
Every Chicago 1st time home buyer will have some idea of what kind of monthly payment they can afford. When you are applying for a pre-approved mortgage you will find out how much you can borrow. You won’t necessarily want to borrow the maximum amount available to you. Determine what you are comfortable with and then stick to that amount. That will determine the price range of home you should be looking for.
Select the type of mortgage that will best suit you. Not everyone will want the same type of mortgage. There are several factors to consider which have a bearing on how much you want to pay on a monthly basis. Ask yourself how long you expect to stay in your new house and how much your current earnings might change in the near future. These things will have a bearing on what kind of mortgage is best suited to your situation.
You should also consider the frequency of your regular mortgage payments because this can have a direct bearing on the overall cost of your mortgage. Over the life of your mortgage using accelerated weekly or bi-weekly payments can save thousands of dollars in interest. The simple fact is that every extra dollar you pay against the principal will reduce the interest you pay. A bi-weekly payment plan, for example, will result in you actually making the equivalent of 13 monthly payments instead of 12. That extra payment is put directly against the principal.
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