Mortgages for First Time Home Buyers

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Mortgages for First Time Home Buyers

If you're looking to buy a home for the first time, then you're probably quite unprepared for the business of it. That makes sense-it seems like there isn't always a lot of free information on home ownership just lying around. But if you really want to buy a new home, you need information-and you may need a special deal. So let's see if we what we can find that's special for first-time home buyers, because it could really help you get where you want to go.

First-time buyers often get pulled in by scam artists trying to make a profit from the things you don't know about the business of buying a home. Always be sure to watch out for these crooks; research the lender before you make a down-payment to someone who won't really help you. But why not just borrow from banks, you ask? Because banks don't specialize in mortgage loans. Would you want to get brain surgery from a general practitioner? Then why would you get a mortgage loan from a bank? Find a good, solid, reputable mortgage lender and make sure they are who they say before you start getting that loan to buy your new home.

A first-time buyer is usually charged ... Mortgages continued

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A first-time buyer is usually charged a low, manageable interest rate with small principle payments over a long period of time, so you can afford to pay it all back. This lets you pay back at your convenience, without having to dread the bill coming in every month-because you can manage it. However, your house will be held as collateral for the loan, which means that if you can't make the payments, the lender gets your house. But that's the risk you run when buying a house-just make sure you can cover the payments.

To help you with the financing, don't forget that the government wants you to build a house-mainly because it helps the economy by providing jobs and buying materials and so on. The government offers loans as well, ones that are easily manageable, such as the VA (Veteran Affairs) and FHA (Federal Housing Administration) loans. The VA is only for active or honorably discharged military personnel, but the FHA is open to any employed person with good credit in the last two years. The FHA has a maximum 5% down payment, and as long as you have a less than 41% debt-to-income ratio (and that includes the mortgage), you qualify. The government also provides grant money to new homeowners. In fact, up to $200 million are authorized each year for the next few years so that people like you can buy a new home.

So the finances are all in place, and there are plenty of special deals for first-timers like you. Now you know a few more things about being a first-time home buyer, and you can go out and buy a home without worrying so much about your finances.