Explaining The Different Types of Home Loans And Interest Rates

I needed a mortgage broker when I bought my first place but I didn't know so. My first house was bought during the post tech boom days of the early 2000's. Although many businesses with bust, the real estate market was still sitting pretty. Loans were being created factory style and just about anyone could qualify for one. It seemed as if the criteria were so low that anyone with a job and pulse could get one. I had those two things so I was the perfect candidate for a home loan. What I didn't know was that I was getting a crummy deal. I was placed into a high interest thirty year loan that was a total ripoff. My high interest rate kept me from building any true equity in the home. I learned about the importance of having a low interest rate home loan the hard way. Hopefully, you will take my story as an example of what not to do.

 

What you should not do is buy a house when you already have a ton of debt. I had a huge student loan from a private college and a ton of credit card debt. I work in IT so I was making a good amount of money for my age but my debt nullified it. I took the loan because I could swing the monthly mortgage but I wouldn't realize until almost a year that I was getting ripped off because of the extremely high interest rate. The reason why most people buy a home is because they want ownership (equity) in their home. With my extremely high interest rate I was not able to build any equity. All my money was going towards the interest with a tiny bit going towards the principal. This was a horrible loan and one that I had to get out of.

 

I did everything to get out of this loan but because of my large amount of debt and poor credit score no one would offer me a refinance. I would have to spend a few years paying this mortgage until I had a high enough credit score to qualify for a low interest rate mortgage. 

 

For all who are in the market for a home loan, please take your time. Please build your credit and lower your debt so that you can qualify for a low interest home loan and mortgage.