If you've been paying any attention to financial and economic news lately, you'll know that the housing market has recently taken one of the hardest hits in recent history. Lenders that were all too willing to provide loans that were beyond the means of the borrowers were suddenly exposed for their greedy ways, and a number of financial reforms were put in place to make sure that lending practices were more responsible from now on. Although the market still hasn't fully recovered, it's still possible to find good deals on home loans right now. Here are some tips about getting affordable mortgage rates for first time home buyers.
Unless you're independently wealthy with an overwhelming amount of liquid assets, it's highly unlikely that you'll be able to pay cash for your new home. That's why so many first time home buyers are required to seek out financing from qualified banks and other lending institutions. The process for determining how much money you qualify for can be very complicated, and it's important to do your research before signing your name on the dotted line. Your mortgage is probably the single largest purchase you make in your life, and it's worth taking your time to make sure you don't get involved in something that's more expensive than you can afford.
Tips for First Time Home Buyers
All first time home buyers need to decide between pursuing conventional mortgage financing or government loans from either the Federal Housing Authority or the Veterans Administration. Just like taking out loans for college, there are different advantages and disadvantages for each. FHA loans only require that you be able to put at least a 3.5% down payment. VA loans allow a buyer to put 0% down payment but the buyer has to have served in the military in the past. Conventional loans almost always require at least five percent or more as a down payment. Both FHA & Conventional offer special programs for primary home buyers today, please call your local lender to find out more.
First time home buyers should also consider that FHA loans are almost always more flexible when it comes to assessing the credit rating of the buyer. While conventional bank loans will require that your credit history and rating be pretty much impeccable in order to get your loan, the FHA is likely to be more lenient in extending mortgage financing to those that may have had credit problems in the past.
To get started, we suggest you talk to a local loan officer to start the process in discussing your home buying goals. If you don't know a loan officer then we at National Realty can assist you in locating a trusted individual. The loan officer will answer your questions & assist you in getting you Pre-Approved to buying your future home. Once Pre-Approved, you can start working with your National Realty Realtor in finding the home of your dreams!