One tip for being proactive about managing your mortgage payments over the years ahead is to think carefully about the future when choosing your home and mortgage.

Homebuyers who consider their goals for the future and the possible ways their lives can unfold will be able to make the most informed decisions, choosing home loans that are likely to meet their needs just as well years down the line as they do today.

4 Factors To Consider When Choosing a Mortgage

Below are a few financial goals you should take into account when you are shopping for a home and mortgage.

1. Career plans. In order to apply for a mortgage successfully, you only need to be able to document a two-year employment history. That history does need to show you are on a solid career trajectory. You should ask yourself some questions about that trajectory. How likely is it you will stay on it in five years, ten or twenty? Do you think you might eventually change jobs or industries? Will you or your spouse take time off to raise kids? What is your likely earnings growth potential? What will you need to do to keep increasing your earnings? The answers to these questions can vary quite a bit depending both on your long-term goals and your current job role and industry. Those answers may also impact your plans with respect to your geography (see below).
2. Plans to stay in your home or move. One very important question to ask when applying for a mortgage is, “How long do I want to stay in the home I am buying?” If you expect to stay in the same job at the same company for the next twenty years, perhaps you also expect and desire to stay in the same home. In that case, a fixed rate mortgage is a good option. But if you work in a field where you may need to move to another city in a few years, an adjustable rate mortgage with a low introductory rate might be a fit for your needs. You also might be looking to move in a few years simply to upgrade to a bigger home or move to a more expensive neighborhood. In either of those situations, you might also consider an adjustable rate mortgage for short-term savings.
3. Retirement plans. At what age do you want to retire? How much money do you want to have saved at that point? This should be another key consideration when choosing a home and a mortgage.
   
   Here are a couple of things to think about:
   
   – Make sure that your mortgage payments will be low enough each month that you can set aside what you want in your retirement accounts.
   – You might be buying the home now as an investment. You could either sell it in the future or eventually turn to a reverse mortgage to tap into your equity.
   
   Whatever course you decide on, you will need to run some computations to ensure that your mortgage will help you meet your retirement goals.
4. Plans for your children’s future. One more thing to think over when you are choosing a home and a mortgage is your goals for your children. While you are saving for your retirement, are you also working on creating a nest egg you can pass down to them? And do you want them to be able to inherit your home? If so, do you think your children are likely to want to keep the home, or sell it? With respect to your heirs, it is wise to have a conversation directly with them, rather than making assumptions about their expectations or preferences for the future. That way you can plan together and go over all of the possibilities for your future.

Lending Bankers Mortgage is passionate about helping homebuyers and homeowners make smart financial decisions for their future!

During your consultation, you can discuss your financial plans and goals with us in detail, and we can help you decide how your choice of home and mortgage can impact those plans.That way, you can find the home loan that will help you achieve your dreams for yourself and your children.

If you are ready to get started, please give us a call now at 786-220-1100. We look forward to connecting you with the right mortgage!

Depending on the type of home loan you apply for and your qualifications and down payment amount, you might need to pay for mortgage insurance.

This could take the form of mortgage insurance premiums (MIP) for an FHA loan or private mortgage insurance (PMI) for a conventional loan.

You might be wondering whether this is the same thing as purchasing homeowners insurance. Do you need both? Or are you covered with PMI or MIP?

Actually, homeowner’s insurance and mortgage insurance are two very different things. Let’s break it down.

Mortgage Insurance: Protection for Your Lender

Mortgage insurance actually is not about protecting you or your home or belongings at all. It exists solely for the benefit of your lender.

When you apply for a home loan, a lender will only approve you if they believe that you will be able to pay off the mortgage in full and on time.

But sometimes, borrowers default on their mortgages. Their situations may change. If that happens, lenders turn to mortgage insurance to help protect them.

The more you put down when you buy a home, the less risk the lender takes on. That is why, for example, if you put down at least 20% when you buy a home with a conventional mortgage, you typically do not need to pay for PMI.

If you are paying for mortgage insurance after taking out a loan, you might be able to stop paying for it later once you have built up sufficient equity. But this depends on the type of mortgage and other factors.

In cases where you cannot remove the mortgage insurance requirement after increasing your equity, refinancing your home loan could be an option for getting rid of it.

Homeowners Insurance: Protection for You

Now let’s talk about homeowners insurance. Regardless of whether you need to pay for mortgage insurance, your lender will only approve you for a mortgage if you are paying for homeowners insurance.

This is the type of insurance that does protect you. Specifically, it applies to your home, and usually will also cover personal property and additional structures you may have on the premises.

Your insurance policy may kick in should there be damage or losses due to:

• Wind, hail, or lightning
• Fire
• Vandalism
• Theft

In most situations, you will have to buy separate coverage for earthquake or flood damage. Whether or not this is a requirement will depend on where you live and what the lender’s policies are.

There are some things that homeowners insurance does not cover. Generally, this would be anything that you could foresee and prevent. One example would be damage resulting from wear and tear. The expectation is that you would keep up with the maintenance of your home, preventing such damage from occurring.

Another example would be damage by pests. Once again, insurance companies expect you to get rid of pests as they show up, or prevent them from entering your home to begin with.

So, for instance, imagine that there is a leak in your roof. If that leak was caused by lightning striking a tree that fell on your roof, homeowners insurance might cover the damage.

But if the leak was caused by a failure to maintain your roof, that would be your fault, and not covered by your insurance.

Technically, once you own your home in full and no longer have the mortgage, you could stop paying for homeowners insurance. But that would be a bad financial decision. So, you should plan to pay for it for as long as you will be in your home.

Be Sure to Budget for All the Insurance You Need

Now you know the difference between homeowners insurance and mortgage insurance. The first protects your investment in your home, and the second protects the lender.

No matter what, you need to budget for homeowners insurance. To find out whether you also need to budget for mortgage insurance, ask your mortgage company during your consultation.

If you are shopping for a home in Miami or anywhere in Florida, Lending Bankers Mortgage can answer your questions about these types of insurance. To get started, please call 786-220-1100 to schedule your consultation.

In this post, we offered you some tips that can help you manage your mortgage in a more proactive way. One of those tips was to look for ways you could save on your monthly expenses, and then use the savings to make extra mortgage payments.

But how can you cut back on your monthly costs? Here are a few simple ideas that may free up money in your budget which you can then put toward your home loan.

Ideas That May Free Up Money in Your Budget

• Check for unused subscriptions. Do you have a large number of streaming subscriptions? It is easy to lose track of them. If you have subscriptions you are not using right now, they are just draining your money. Cancel them and put the savings towards your mortgage.

• Look for cheaper insurance. When was the last time you checked to see whether you are getting the lowest insurance rates available to you? Think about calling around for quotes, or working with an insurance agent who can do so on your behalf.

• See if you can lower utility bills. Sometimes, it is possible to reduce your utilities costs as well. Maybe there is a cheaper cell phone plan available in your area that did not exist when you originally got your phone. Or maybe if you call your cable company, you will discover that it is possible to lower your monthly bill on request. In some situations, there are discounts for those who ask.

• Pay off high-interest debt. If you have any small high interest debts that you could afford to pay off now, doing so can spare you from ongoing interest payments. You can then take the money you would have been putting toward interest and put it towards your mortgage instead.

• Cook more economically. Do you plan your weekly meals out in advance? If you do not, there’s a good chance you are shopping and cooking inefficiently. With more planning, you might find ways that you can reduce your grocery expenditures.

• Buy your clothing used. If you are shopping for brand new clothes every year for your whole family, you are wasting a lot of cash. Most clothing can go many years before wearing out. And when you do need to buy replacements, you can save a ton of money at thrift.

• Consolidate your weekly errands. If you are driving into town every day on errands, you might be wasting gas. See if you can schedule your weekly errands in a more consolidated fashion. That way, you can waste less money on gas and put it toward paying off your home loan instead.

Contact Your Local Mortgage Specialist Today!

We hope that some of these suggestions work out for you. Even if you are just putting a little extra toward your mortgage, if you do so on a regular basis, it can add up. Remember to tell your lender to apply the extra payments to the loan principal and not the interest. Looking for