January 30, 2023
Saving money is usually done to prepare for a home loan, but did you know there is a simple trick to saving money on mortgage expenses? It basically involves being a more informed borrower so you don’t mistakenly choose options that cost you more unnecessarily.
Getting the right home loan for your needs can help you maximize your real estate dollar, but you’d be surprised at how many people don’t know the options they have where home loans are concerned.
A Freddie Mac report indicates that housing counseling and/or good financial education is a key benefit when you start the journey toward buying real estate. Knowing which loans are best for your needs and which ones to avoid is key.
A Freddie Mac “Generation Z Study”, concluded, “The dream of homeownership is alive and well” in spite of “some perceived barriers to reaching this goal” according to the introduction of the report, which also indicated that, at survey time, Generation Z felt owning is better than renting.
“Most report that they make a conscious choice to save money, carefully consider whether they can afford something before buying it, and are at least somewhat confident that they will have a financially comfortable adulthood.”
But what does it take to move confidently from being a renter to being a homeowner? In many cases, it’s simply a case of having enough information to make an informed choice about home loans. What does this mean?
For example, do you know the differences between an FHA One-Time Close construction loan and an FHA Rehabilitation loan?
Both require the use of contractors, both involve major construction work (unless you are using a Limited FHA Rehab loan), and both require the project to meet certain standards.
And what about the differences between the types of FHA mortgage needed to buy a condo versus a home in the suburbs?
If all this sounds like a lot of confusing detail, that’s because it CAN be confusing until you know what specifically you need to apply for. And that is where housing counseling comes in.
You can call the FHA directly at their toll-free number, 1-800 CALL FHA, to request a referral to a local-to-you HUD-approved housing counselor who can explain different loan options (even non-FHA loan options as they compare to FHA mortgages) and why some loans are better for some needs than others.
Knowing the facts will help you save money by choosing not only the right kind of mortgage but also the right terms.
An adjustable-rate loan might serve some borrowers well, while not helping other borrowers out at all. Knowing why it works in one scenario but not another is key to making the best home loan choices for you.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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