A wise consumer selects a mortgage
lender prior to shopping for a home. You see, first time home buyer
loans can end up costing you a lot more than you bargained for if you
shop for your home first.
What often happens is you
fall in love with a beautiful home that is on the outside range of what
you can afford. And because you have invested interest in this particular
piece of real estate youíre more inclined to go into a loan situation
you can't afford.
To make sure you can
realistically afford your mortgage payments, itís best to understand all
the potential costs upfront before you fall in love with that dream home
that is really outside your financial comfort zone.
It will take some research
and comparison shopping in order to find both the best lender and the best
in first time home buyer loans.
The loan package best suited
to your needs will offer you terms you can handle now and in future.
Itís important when looking for first time home buyer loans you
take into account your future plans. For instance, are you planning on
starting a family? If so, itís important to consider the potential
reduction in your family finances if you or you spouse decides to take
some time off to raise the children).
Further, if you have poor
credit, youíll be required to pay a higher rate of interest than those
who have a good credit rating.
When it comes to first time
home buyer loans, the amount of your down payment will also be taken
into account when your interest rate is calculated. Think of it this way,
the larger the down payment, the better the interest rate. So, before
locking yourself into one of the first time home buyer loans
currently on the marketplace, youíll want to consider the advantages of
contributing a decent down payment. This will keep both your interest rate
and your payments much more reasonable.
Among the options for
time home buyer loans are variable rate and fixed rate mortgages. The
first fluctuates over the course of your mortgage and the later keeps
payments the same.
Another factor to consider
is your debt to income ratio. In other words, the amount of money you
bring in opposed to the amount that goes out. When determining your debt
to income ratio you must take things like car payments, student loans and
credit card balances into account.
There are programs available
to assist first time home buyers in obtaining a loan. Talk to your lender
and do some research of your own to discover the best option for you.
Remember, when shopping for first
time home buyer loans no question is stupid. Itís very important
that you understand the ins and outs of any mortgage loan prior to signing
on the dotted line.
Mortgage Lending - A few tips on what to watch out for.