First time home buyer typically have some very specific options when it comes to mortgages. But as a first time home buyer, you’re probably brand new to home mortgage types and may need some assistance. Here are some tips to help you get started. You can do your research online, but be aware that different home mortgage lenders offer different loans for first time homebuyers. Here are some common types of mortgages available:
– Fixed-rate Mortgage. A fixed-rate mortgage allows you to choose a low initial interest rate. For many first time homebuyers this can be a great choice because it allows you to lock in a low rate. This is often the preferred type of mortgage for young people looking to buy in big chunks of money. This type of mortgage is usually offered by many mortgage lenders, so shop around to find the best rate and terms.
– ARM Loan. An ARM loan allows for first time homebuyers to borrow a bigger amount of money than a fixed-rate mortgage would allow. An ARM loan is offered by many of the same mortgage lenders who offer fixed-rate loans, so shopping around is really not difficult. The biggest benefit to an ARM loan is the fact that the interest rates do not go up for the duration of the loan. For first time homebuyers, this is a great option because it allows them to get a big payment right away.
– Credit Report and Disputing. Before applying for a mortgage, a home buyer should request copies of their credit report and review it with a copy lawyer or consumer affairs agency. Home buyers should review their credit report to make sure there are no errors that negatively affect their ability to qualify for the mortgage. The lender will sometimes dispute negative items on a credit report, but it is the buyer’s responsibility to prove in the affirmative that the item is incorrect. In order to do this, the buyer will need to access their credit report online and determine if there are any errors that have been reported.
– Cash Out Properties. This type of loan requires a buyer to put down a down payment of at least 20% of the total purchase price of the property. This is a great option for a first time home buyer because it allows them to buy their own home but not to pay back the entire loan. This will also allow them to qualify for a lower interest rate and less of a monthly mortgage payment.
– Gift Funds. There are sometimes gift funds available to first time home buyers who qualify. These gifts can come in the form of tax breaks, reductions in mortgage interest rates, real estate incentives, certificates of deposits, and more. To find out what is available in your area, talk with your local real estate agent.