First Mortage Primer
Posted at 9:07 AM
First Mortgage
Stepping Onto The Mortgage Ladder For The First Time.
Securing a mortgage as a first time buyer can be a daunting experience. You want to spread your wings but your worried at making the wrong choices of mortgage lender or mortgage deal.
In spite of numerous rules and legislation it is still preferable to have a very least a basic understanding ofthe mortgage markets and how the mortgage market operates.
There are numerous different mortgages, deals and programs for the prospective first time mortgage seeker. Its important to look into the details of these to establish if they are suitable and if so, if they are perfect for your requirements. Remember if a deal is packed with incentives and fluff it probably means at some point you will bepaying for it in the future.
There are whole ranges of first time mortgage plans dependant on your current situation and what you expect to happen in the future. This is not like buying a new outfitonce you have made a decision you will usually find it willbe difficult to change your mind. Probably one of the most popular starter mortgages is a fixed rate mortgage. You can usually get these for periods of 30, 20, 15 or 10 years depending on circumstances and the lender.
This means that the interest rate and the monthly paymentwill remain the same and will not change throughout the entire period of the loan. Usually the rate will be at apremium on the current prevailing rate which will fluctuate with the movements in the stock and money markets (Wall Street NYSE).
These type of deals are ideal for first timers if you plan on living in your property for more than 10 years and if you like stability rather than change in your monthly payments and budget.
Its sort of like knowing what your rental payments will be for several years, many new owners find this comforting especially when first putting a foot on the property ladder. But if you plan on staying put in your home only for a shorter time, maybe you intend to upgrade latter on a short term first time buyer mortgage might be the better choice for you?
If you don't want your mortgage to be the same for the next10-30 years or feel that the current fixed rates offered is over estimated and does not really effect the true estimate of interest rates in the future, you might opt for aadjustable or variable first loan.
The interest rate and the cost of most first time buyer mortgages still usually remain the same for a specific number of years, then after this period the payments and interest rate has chance of changing, usually annually, in line with the market.
Homeowners who have owned homes in the past can remember when we had much higher interest rate than we are experiencing today.
These variable rate mortgages are ideal if you need initial stability, but expect to be able to cope with changes later on. It can also be more flexible if you expect to upgrade or move once circumstances change.
There are different regional & state programs offered by a range of mortgage lenders that offer additional benefits to first time buyers. This type of first time buyer mortgage might offer reduced interest or points if it is your first home or if you havent owned in the last three years.
There are also preferential deals for first time buyers that will help you secure the credit you need to get into a home. There are even Federal programs, such as the FHA (Federal Housing Administration) loan programs as well as more localized programs both State and those funded by private organizations.
If you are retired military (veteran) and intend to buy a first home you're well catered for with special veteran loan schemes. The Division of Veterans Affairs has set up a scheme for you that will guarantee some of the most popular first time buyer mortgages (such as the 15 or 30 year fixed rate loans).
There are a many mortgage companies that want to help you find a mortgage. But never forget, this is a considerable investment on your part and change your future plans. It will be in your best interest to have some understandingof everything presented to you when looking for the first time deal and you must check out all the possibilities before choosing a deal.
Ask family members and experienced friends and get their opinions about a specific loan or use their knowledge and experience or ask them to refer you to a trusted broker. Just because you are doing this for the first time, it doesn't mean you have to be completely at their mercy does it?
Show them you grasp the basics and tell mortgage lenders and mortgage brokers that you have some idea what you're really looking for; they will treat you with more respectand this will help you get a better deal and so you can take that plunge into homeownership with no fears.
Jim Muscali is the occupier of FBBH Mortgage Incwhich is the premier resource for mortgage information. For questions or comments about this article go to: http://www.fbbhmortgage.com
Stepping Onto The Mortgage Ladder For The First Time.
Securing a mortgage as a first time buyer can be a daunting experience. You want to spread your wings but your worried at making the wrong choices of mortgage lender or mortgage deal.
In spite of numerous rules and legislation it is still preferable to have a very least a basic understanding ofthe mortgage markets and how the mortgage market operates.
There are numerous different mortgages, deals and programs for the prospective first time mortgage seeker. Its important to look into the details of these to establish if they are suitable and if so, if they are perfect for your requirements. Remember if a deal is packed with incentives and fluff it probably means at some point you will bepaying for it in the future.
There are whole ranges of first time mortgage plans dependant on your current situation and what you expect to happen in the future. This is not like buying a new outfitonce you have made a decision you will usually find it willbe difficult to change your mind. Probably one of the most popular starter mortgages is a fixed rate mortgage. You can usually get these for periods of 30, 20, 15 or 10 years depending on circumstances and the lender.
This means that the interest rate and the monthly paymentwill remain the same and will not change throughout the entire period of the loan. Usually the rate will be at apremium on the current prevailing rate which will fluctuate with the movements in the stock and money markets (Wall Street NYSE).
These type of deals are ideal for first timers if you plan on living in your property for more than 10 years and if you like stability rather than change in your monthly payments and budget.
Its sort of like knowing what your rental payments will be for several years, many new owners find this comforting especially when first putting a foot on the property ladder. But if you plan on staying put in your home only for a shorter time, maybe you intend to upgrade latter on a short term first time buyer mortgage might be the better choice for you?
If you don't want your mortgage to be the same for the next10-30 years or feel that the current fixed rates offered is over estimated and does not really effect the true estimate of interest rates in the future, you might opt for aadjustable or variable first loan.
The interest rate and the cost of most first time buyer mortgages still usually remain the same for a specific number of years, then after this period the payments and interest rate has chance of changing, usually annually, in line with the market.
Homeowners who have owned homes in the past can remember when we had much higher interest rate than we are experiencing today.
These variable rate mortgages are ideal if you need initial stability, but expect to be able to cope with changes later on. It can also be more flexible if you expect to upgrade or move once circumstances change.
There are different regional & state programs offered by a range of mortgage lenders that offer additional benefits to first time buyers. This type of first time buyer mortgage might offer reduced interest or points if it is your first home or if you havent owned in the last three years.
There are also preferential deals for first time buyers that will help you secure the credit you need to get into a home. There are even Federal programs, such as the FHA (Federal Housing Administration) loan programs as well as more localized programs both State and those funded by private organizations.
If you are retired military (veteran) and intend to buy a first home you're well catered for with special veteran loan schemes. The Division of Veterans Affairs has set up a scheme for you that will guarantee some of the most popular first time buyer mortgages (such as the 15 or 30 year fixed rate loans).
There are a many mortgage companies that want to help you find a mortgage. But never forget, this is a considerable investment on your part and change your future plans. It will be in your best interest to have some understandingof everything presented to you when looking for the first time deal and you must check out all the possibilities before choosing a deal.
Ask family members and experienced friends and get their opinions about a specific loan or use their knowledge and experience or ask them to refer you to a trusted broker. Just because you are doing this for the first time, it doesn't mean you have to be completely at their mercy does it?
Show them you grasp the basics and tell mortgage lenders and mortgage brokers that you have some idea what you're really looking for; they will treat you with more respectand this will help you get a better deal and so you can take that plunge into homeownership with no fears.
Jim Muscali is the occupier of FBBH Mortgage Incwhich is the premier resource for mortgage information. For questions or comments about this article go to: http://www.fbbhmortgage.com
