One of the ultimate dreams of everyone is to have a place to call home. When it comes to your journey of purchasing a home, you get a mix of emotions. You are excited and at the same time a bit scared. You feel excited in the sense that you are going to buy something that will surely give you a sense of security. You are a bit afraid of making mistakes as it will surely cost you a lot of money. Buying a home does involve a lot of money, and so you want to make sure that you secure the mortgage possible.
Tips for First Time Home Buyer
If you are a first time home buyer, the following tips are a big help to you.
How much you can afford?
Buying a home in the form of mortgage lending can significantly affect your monthly expenses. Hence, it is important to know beforehand how much you can afford. You will take into account your monthly income and expenditures. There are online mortgage calculators, and they can help you find out the estimated amount you can borrow based on the loan term and interest rates. Try to experiment on different numbers so that you will know which strategy works best for you.
Consider all relevant cost
As a homeowner, you will not only have to deal with the monthly mortgage payment but as well as other expenses including home insurance premiums and taxes. These costs should be calculated in advance so that you can gauge your financial ability to buy a home.
Are you qualified for a mortgage?
To find out if you are qualified for a mortgage loan your credit score must be checked. You should have a good to excellent credit score although there are a few who give a loan to people with bad credit. Not having a good record classifies you as a risky borrower and so the interest rate is pretty higher than those with an outstanding record. The debt to income ratio should be taken into account too. Can you afford the down payment? The minimum down payment is 3.5% of the cost of the property.
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Know the different types of loans
When taking out a mortgage loan, it is important for the borrower to familiarize various loan types such as the adjustable rate and the fixed rate. Some loans are backed by the government like the VA loan, FHA loan, and the USDA loan. Know and compare the different types to find out which one suits you best.
There are a lot of things to consider when buying a home. It does not only end in the search for the right property. Your ability to pay the home mortgage matters a lot. If you cannot keep up with the monthly payment, then you will find yourself being ousted from your home. Choose a property that does not only suit your lifestyle but your financial ability too.
The Freedom Mortgage Corporation
The Freedom Mortgage Corporation provides home mortgage loans for first time home buyers. For more than 25 years, the company been a big help to Americans in making their dream of home ownership come true. If you are planning to buy a house or refinance your existing mortgage, feel free to contact the Freedom Mortgage Corporation.