Mortgages may seem like a modern contrivance but they actually have a very long and substantial history. Humans have been using mortgages in one form or another since ancient times. For example, the Code of Manu (or “Manusmrti”) is an ancient Hindu text that lays out primitive forms of mortgage laws for society. The code encouraged fair and equal mortgage practices and forbade mortgage abuses. The Manusmrti is thought to have been written around 1000 B.C.E. Although much has changed since then, the practice of issuing and paying a mortgage for home ownership has not gone away by a long shot.
In order to better understand how a mortgage works, here are three pieces of advice for getting the home of your dreams:
- Clean Up Your Credit: Your credit score shows how financially reliable you are to home mortgage lenders. A low credit score can deny you many offers, leaving you with meager options for getting a home. The best home mortgage rates go to those borrowers with healthy credit. Make sure to improve your credit score before applying and to change any errors that may be present in your report.
- Divide (Your Money) and Conquer: Low interest home loans are meaningless if you don’t wisely budget your money. In general, it is recommended that no more than 36% of your gross monthly income should go toward your mortgage. Any more and you can risk falling into debt.
- Save, Save, Save: The best mortgage lenders tend to favor those who have money saved up for after-purchase costs, such as repair work and closing costs. Not having enough money saved up for after the down payment can jeopardize your mortgage deal.
Good home mortgage rates are not impossible to get. By taking prudent steps before, during, and after the process, you can be well on your way to living in the home of you and your family’s dreams.