From buying a home to even a second home or a vacation home, no matter what the property, it is important to understand the details of your mortgage. Unfortunately, however, the majority of property owners, nearly 60%, feel that they do not have an adequate understanding of their mortgages. Understanding your mortgage, be it for your primary residence or your vacation home, is important, especially if you are like nearly 15% of home buyers that finance the entirety of their home purchase with their mortgage.
Understanding a mortgage for a home or a vacation home is particularly important for the first time home buyer. First time home buyers make up more than 30% of prospective home buyers and a similar percentage of millennials is looking to purchase a home for the first time. These home buyers are often younger, and so it is even more important that they educate themselves on the semantics and the fine print of their mortgages.
A mortgage plan is necessary for the majority of homeowners as well, particularly with the price of houses. For most people, mortgage planning is a necessity, as the average home price is nearly $200,000. The majority of people are not able to pay for something that expensive out of pocket, and even homeowners considered to be wealthy will also consider a mortgage plan and loans for a vacation home. In fact, the majority of home owners – more than 90% of them – have a fixed rate mortgage. And more than 20% of home buyers took out an FHA loan in order to finance their homes.
Buying a home, be it your first home, your second home, or a vacation home, is a big step in life. It\’s an exciting process, one that can shape your life for the time that you live there. However, there are a lot of things to consider when buying a home, particularly if you are in the process of buying your first home. It\’s important to educate yourself about your mortgage, particularly if you are financing the majority of the cost with your mortgage plan. Mortgage planning should be thorough and well thought out, and it is often recommended that you seek the counsel of a professional financial planner, who can help you to navigate the intricacies of a mortgage that you may not be familiar with. From FHA mortgage loans to a fixed rate mortgage, you must consider all your options thoroughly.