Buying A First Home
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.
Calculate how much you can comfortably afford to spend on your mortgage each month. Deduct your down payment from the amount of the purchase price of the home and determine whether the payments on the home you are considering will be manageable. You need to set a strict limit and stick to it, no matter how tempting it may be to spend more. Tell your realtor your top price and advise him you don’t want to look at homes that cost more. Realtors make money on commissions and the more expensive the house they sell, the high their commission. Don’t let your realtor talk you into a house you can’t afford.
Never jump into a contract without knowing all the facts. You will need a title search and a home inspection on any home you consider buying. Generally the buyer must pay the fees for these services. Check around for the lowest mortgage interest rates you can qualify for to save thousands over the life of the loan.
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.
There is the closing fee that can be quite stiff for couples who are buying a house on shoestring budget. Add all these fees to the actual mortgage price and you get the picture. If the cost of the entire mortgage is beyond your humble budget, look for a cheaper home and shop for other lenders who can offer affordable fees and a lower interest rate. Always negotiate for lower closing costs; lenders are willing to listen and give you a discounted closing fee.
It is possible to compare the terms offered by different lenders online. There are websites that offer mortgage comparisons as a service to the public. The best mortgages for most people are fixed rate mortgages of 20 or 30 years. Adjustable rate mortgages can cause your monthly payments to go up suddenly, and balloon mortgages can cause refinance problems later.
With the mortgage information you need tucked under your belt, you can negotiate for a reasonable and affordable loan and keep your house for years. A dream house may not be for you, but you can make that house your dream house, one that is for keeps.
If you are looking for more advice about mortgage Lansing MI, you should check out this site which has great info about refinance Lansing.
