What Every First Time Homebuyer Should Know
The anticipation of claiming your stake in the American Dream should be a proud moment. Being a first time homebuyer has immense benefits but can often be a little intimidating if you are just starting out. Here are a few things to consider:
These are the Best of the Best:
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When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.
Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.
The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.
Save Your Pennies
When you are trying to buy a home you have to have money saved. There are three major financial components to buying a home: earnest money, the down payment, and closing costs. Your earnest money is to let the seller know you are serious about the purchase and usually varies from $500 to $1000. Your down payment is an amount based upon the type of loan you secure, usually 1%-10% of the total loan amount. Closing costs are the fees associated with processing your loan and they usually can run anywhere from $500 to $3000 or more due at closing time.
Look for Special Programs
If you are a single parent, have a low income home, or just have an immature credit profile there are many lending programs that cater to those situations. Most helpful are government funded loans like FHA loans which monitor the amount of down payment needed and fees that can be collected at closing. These loans also take a more lax look at your credit report offering more opportunities for diverse situations.
Our Best First Time Home Owner FHA Mortgage Lenders:
These are the Best of the Best:
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The average rate of interest on mortgage loans continues to fall and has been under 5 percent for almost all of this past year, with this recent round of rate cuts seen as the lowest for borrowers in years. The reason, many borrowers today have bad or at least less than perfect credit scores. Still a borrower with less then perfect credit an jump through a few hoops and get a fairly decen rate on a loan.
With all of the excitement of your home purchase make sure you understand what you agree to. Don't be afraid to ask questions and don't let a lender or real estate agent push you into a loan amount you aren't comfortable with. Have fun, be discerning and you visualize yourself in your new home.
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