As first time buyer, there is a lot to know. I'll sit down with you and explain your options.
The first thing you want to do is get pre-approved as a buyer. The pre-approval process takes some basic financial information (salary, savings, credit card debt, other loans, retirement accounts etc). Getting pre-approved makes it much easier to understand how much you can afford to buy. Looking for a home without knowing your limits is something you don't want to do.
Mortgage companies approve on a set formula that may or may not work for you. Assume you get approval for $300,000. A $300,000 loan on a 30 year mortgage at 6% comes out to about $1800/month. There are also taxes and insurance costs that are on top of that. Just because the bank will lend you $300,000 doesn't mean your lifestyle makes that the right choice. Now there may be HOA (Home Owner's Associations) fees that come with your monthly cost as well. Condos, Townhomes and some detached homes come with these monthly fees for services such as exterior infrastructure (painting, roofing, sewage, landscaping etc).
If you are a first time home buyer or you are considering purchasing a home
under $300K, you might consider taking advantage of the various down
payment grant programs. Basically, these programs let you finance the down
payment and closing costs – the benefit is that you do not have to come up with
any cash to buy a home and you will get a higher tax deduction.
If you want to put 10%-20% for a down payment, but you don't have enough cash,
can look at what is called a 80-10-10or 80-20 loan. By getting this type of loan
you eliminate the mortgage insurance premium that is incurred when you put less
than 20% down.
Mortgage insurance or PMI as it is normally called, does not protect you, the mortgage loaner, it protects the institution that lends the money. But you pay it. Eliminating it comes from putting down at least 20% when purchasing a home. So creative lending can help when strapped for cash.
There are over 300 different types of loans – conforming, non-conforming, no
credit check, ZERO down, no income or asset verification, or no employment
verification. Our mortgage partners will review your situation and recommend a
few loans that best fit your individual needs.ad
Read this article to find out more about 6 mortgage rip-offs to avoid and 6 mortgage myths that can cost you money.