Getting a first time home buyer mortgage is a very big deal and as the name of the loan implies, it is for people who have not acquire a home before. It's a great thing especially for couples who are just starting with their life and needed a little help to purchase their first home.
Knowing what a first time home buyer mortgage is
The correct term for mortgage is a mortgage loan and it is a loan secured to finance a real estate purchase. This often comes with a specified amount to be paid for at certain periods and set interest rates. The mortgagor is the borrower which will then give the mortgagee as the lender with the property as the collateral for the loan.
A first time home buyer mortgage is not only suitable for people who have not owned a house yet. Some programs allow the same benefits of a first time home buyer mortgage to people who have not owned a home within the last three (3) years. This first time home buyer program is not true for all financing institutions so you just have to check for those who offer one.
The first time buyer home mortgage allows people to purchase a home for a low down payment and sometimes even none. It also limits the fees that lender were allowed to charge to the lendee. It can also wonderfully defer payment and subsidize the interest costs.
But the most important thing for a first time home buyer mortgage is for the borrower to have a good credit. Financiang bad credit home loans is very difficult to do, since the subprime mortgage crisis of 2008 and beyond. A good credit history assures the lending firm that you have the best potential to pay off your loan. Most people often focus on saving money to pay for the down payment that they often forget that their burden could be eased by a first time home buyer mortgage. You just to scour and search for great financing institutions and lending firms and you will be surprised at how generous are their mortgage offers for first time home buyers. Some may even grant a first time home buyer mortgage that is as much as 97% of the house's value.
Having a good credit score, as mentioned is an important factor to get the lowest mortgage rates today, but having a too good credit score may lose you the opportunity to get financial assistance. They will see that you are more than capable enough to purchase your own house without having to apply for a first time home buyer mortgage and will just grant it to someone who really needs it.
However, someone should not just rely on the first time home buyer mortgage. A person or a couple who would want to borrow and get a first time home buyer mortgage must also be realistic. Realistic meaning that you should just purchase a home that you can really pay for. Experts recommend that you purchase a home that would not exceed the 28% of your gross income since you should also consider payment for the annual mortgage, the taxes and a home insurance. You may also want to save as much as 5% of the overall value of your home just to be sure you have something to pay for repairs.
Many programs for a first time home buyer mortgage also restricts borrowers to the value of the home they are planning to have. You may become too idealistic because you believe a first time home buyer mortgage will allow you to have a home in a gated community. But a first time home buyer mortgage does not work that way and it is specifically designed to people who don't have enough to buy even a modest bungalow house.
Drawback of a First Time Home Buyer Mortgage
As mentioned, a mortgagor is restricted to purchase expensive homes. You may just end up buying a house that does not really suit your requirement. A first time home buyer mortgage also does not allow the borrower to sell the home soon and may lose the programs benefits.
This drawback should not stop someone to have the home that he or she wants for his or her family. Combined with a decent credit score, enough money for a down payment and the help of a certified lending firm, you can relax in your new home, of course with the help of a first time home buyer mortgage.
Author Resource:
Oliver Silverstones makes it easy for the first time buyer to find all the state and local first time buyer programs. He keeps a daily update of the lowest mortgage rates today , as well as providing great advice to avoid most first home buyer headaches.
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