talk you out of that risky adjustable-rate mortgage. 3. Get pre-approved, not just pre-qualified. “Pre-qualified” is like saying, “I might be able to run a marathon.” “Pre-approved” means, “I trained, stretched, and bought the weird energy gels.” 4. Compare rates and fees. The interest rate is just one part of the equation. Watch for origination fees, discount points, lender fees, balloon payments, hidden curses, etc. 5. Know your budget. Not just “can I make the mortgage payment?” but “can I make the payment AND still eat food that isn’t ramen?” Private Mortgage Insurance: The Fee That Just Won’t Quit If your down payment is less than 20%, you’re likely signing up for PMI (Private Mortgage Insurance). It’s like paying for a security guard who doesn’t actually protect you—but keeps your lender warm at night. It usually adds about $100/month for every $100,000 of home value. It’s not forever, but you’ll have to reach 20% equity before it goes away. (And no, asking nicely doesn’t work.) Timing is Everything (And So Is Locking Your Rate) Mortgage rates are fickle little creatures. They change faster than fashion trends and sometimes for equally mysterious reasons. One day you’re at 5.25%, and by the next morning it’s jumped to 6.1% because someone sneezed on Wall Street. When you find a good rate, lock it in. Think of it like saving a cookie for later—you don’t want someone else to grab it while you’re debating.
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