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Mortgaging Your First Home |
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Securing a mortgage for the first time can be a frightening time in your life. You want to make sure you understand what is going on so the mortgage lender cant take advantage of your lack of knowledge. In spite of numerous laws and regulations it is still better to have a very least a basic understanding of the ideas and systems of the mortgage industry. There are many different deals, incentives and programs for the first time mortgage buyer. Its important to look at each of these in detail to find out if they are worthwhile, and if so, if they are ideal for you and your circumstances when it comes time to mortgaging your first home. The old saying if it seems too good to be true it probably is should be kept in mind at all times. There are whole range of starter mortgage plans dependent on your situation now and what you anticipate will happen in the future. This is not like buying a new computer game once you have made a decision you will usually find it will be difficult to change your mind. Probably one of the most popular starter mortgages is a fixed rate mortgage. These are available for periods of 30,20,15 or 10 years, depending on the lender and situation. This means that the mortgage rate and the payment rate will remain the same and will not change throughout the duration of the mortgage. Usually the rate will be at a slightly higher rate than the current market rate as the lender will have to anticipate changes due to market fluctuation in the future. These fixed rates are perfect for first time buyers if you plan to live in the home or property for more than 10 years and if you like certainty rather than change in your monthly payments and budget. its sort of like knowing what your rental payments will be for several years, many new owners find this comforting especially when first putting a foot on the property ladder. But If you plan on staying put in your home only for a shorter time, maybe you intend to upgrade latter on a short term first time buyer mortgage might be the better choice for you ? If you dont want your mortgage to be the same for the next 10-30 years or feel that the current fixed rates offered is over estimated and does not really effect the true estimate of interest rates in the future, you might opt for a adjustable or variable first loan. The interest rate and the cost of most first time buyer mortgages will still remain the same for a specific number of years, then after the initial period the payment and interest rate has the likely hood of fluctuating annually, dependent on the market rate. Homeowners who have owned homes a number of years can recall the times when we had higher interest rates than we are experiencing at the moment but dont forget a mortgage is a longer term commitment so think carefully before jumping in to any deal. These variable type mortgages are ideal if you need stability at first, but can cope with or accept changes later on. It can also be more flexible if you plan on staying put for the duration of the fixed part of the mortgage but planning a move or an upgrade in a few years time. There are different programs both state or federal offered by different mortgage lenders that provide other options to first time buyers. This type of mortgage could offer reduced interest or maybe points if it is your first home or if you have had a home for a few years (usually three) There are also incentive options for that can help you obtain the credit you need to get into a first home. You will find Federal schemes, such as the FHA (Federal Housing Administration) schemes as well as more localized programs both State and those funded by mortgage companies. If you are a veteran (former military) and looking at buying your first home youre catered for as well with special veteran programs. The Division of Veterans Affairs has arranged a program for you that will guarantee some of the most popular first time buyer mortgages (such as the 30 or 15 year fixed rate loans). There are a number of mortgage companies and brokers that want to help you find a loan. But never forget, this is a serious commitment on your part and my effect future plans. It will be in your interest to have a basic knowledge of everything presented to you when looking for the first time deal and you must check out all the options before choosing the deal for you. Talk to family members and friends, get their views about a specific loan or use their contacts and experience or ask them to refer you to a trusted mortgage brokerage. Just because youre new to this, it doesnt mean you have to be completely clueless does it? Show you know the basics and tell mortgage experts that you have some idea what youre really need for this they will at least know you have some idea of the process involved which will help them and you find a better deal quicker and more effectively. This means your step into property will not be fraught with problems and regrets. |
| Jim Muscali is the occupier of FBBH Mortgage which is the premier resource for mortgage information. For questions or comments about this article go to: http://www.fbbhmortgage.com |
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