Mortgaging Your First Home by:Jim Muscali
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.
About the author
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:
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