Real Estate
What You Should Know About Buying A First Home
October 28, 2009 by John Dashwood · Leave a Comment
People who are looking to buy a home for the first time need to consider a number of factors. Most private mortgage lenders require a down payment of 10% to 20% of the purchase price of the home. Depending on the price of the home you are considering, this could be between $5000 and $20,000 dollars. There may be some first time buyer programs that will lower the down payment.
Most first time home buyers are young newly-weds struggling with their budget but they are keen to get their own house instead of renting an apartment for years. The money that would go to the rent would instead go to the mortgage. This is a smart decision, but there are a lot of things you should know to get yourself the best mortgage deal and save you hundreds of dollars in the long haul.
The first thing couples should do is to stick to their budget. I f that house so perfect for you but the price is beyond your means, don’t fantasize about job promotions and increased pay and think that you can swing it. Be realistic. Assess the price according to your present not future means. Should you get a pay increase, you can always make modest improvements on the house you bought. In the long term, you increase the value of your home and this will serve you well should you decide to sell your home at the right time.
Young newly-weds are always excited at the prospect of owning a house that they jump into a deal without examining what goes with the mortgage. They take the first offer that looks good on paper without knowing that there are fees and more fees attached to the deal.
It isn’t unusual for young couples to receive help from their family with the down payment for a home. It may, however, be to your advantage to use government first time buyer programs. In addition to programs offered by the federal government, you state may also offer incentives for first time homeowners. You may be able to use a 5% down payment or no down payment at all. With a good to excellent credit rating you may still qualify for low interest rates. Even if the down payment is waived, you will need several thousand dollars for closing costs on the loan.
The closing costs include the origination fee from the lender, the cost of title search and any other necessary fees that must be paid by either the buyer, the seller or both before the sale is final. If the home requires repairs, the lender may require that either the buyer or seller set aside funds in an escrow account to insure the repairs will be completed. Be prepared for disappointment. Your lender may find a problem with the home and decline the loan for that reason. VA and HUD insured mortgages have strict regulations for the homes they will finance.
You can compare lenders online. Many will give a quote for their origination fee and current interest rates. It is always best for new homeowners to seek a fixed rate mortgage rather than an adjustable rate or balloon mortgage. Looked for the lowest fixed rate you can qualify for and consider the origination fee and other costs when deciding on a mortgage lender.
Once you have looked into the financial aspects of buying a house, you are ready to start looking at houses. Make sure you understand what your monthly payments on any given house will be before you decide it’s your dream house. Not all dreams are pleasant and you don’t want to end up with a nightmare.
If you are looking for more advice about Lansing Michigan mortgage, you should check out this site which has great info about mortgage lenders Lansing.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
