First time home buyer loans

It's a common mistake for home-buyers-to-be: They focus on saving as much money as possible for a down payment instead of paying off other debts. A better approach is to use extra cash to eliminate credit-card and other high-interest consumer debt even if that means you can put down less on your future home, says Lori Vella, senior vice president of national lending for Washington Mutual.

Usually, for those who want to buy a home for , the best way they can find the money for the home of their aspiration is to take out a loan. This is as a rule renowned as a debt loan. For a major time home consumer, loans such as bridging loan loans can be very bewildering.

Now you're ready to start shopping around for the right loan. As we said, a first-time home buyer with a steady job and good credit can put down as little as 3% these days. These loans are more available, and more reasonably priced, now that they're acceptable to Fannie Mae and Freddie Mac

Mortgage loans can either be a fixed rate loan or a variable rate loan. A fixed rate loan offers the same interest rate and payment rate every month. With a fixed rate loan, you will always know how much you will need to pay every month and you will know when you have already accomplished all of your loan payments. With a variable rate loan, you can start with a lower interest rate as well as a lower monthly payment. However, your interest rate and your monthly payment amount can change several times over the lifetime of your loan. Usually, this amount is tied up to a financial index like the U.S. Treasury Securities index.

There's no income limit to qualify for an FHA-insured loan. However, since these loans are geared toward helping first-time home buyers and low- to moderate-income families, there's a limit to how much you can borrow. The amount varies from region to region, but it's capped at $290,319 in high-cost areas ($403,750 in Hawaii), says Laurie Maggiano, a HUD spokeswoman. To check your area's ceiling

In this new era of interest-only loans, many home buyers are skipping this advice. But if you can swing it, this is still the way to go. Not only will this provide some equity in your home, but it's also a way to avoid private mortgage insurance, or PMI. (This protects the lender if you default on the loan.) Costs for PMI can be significant over time " about $40 a month per $100,000 of the loan, according to estimates by the Federal Trade Commission.

Pay Closing Costs Upfront Wrapping them into your mortgage means you'll end up paying interest on that extra few thousand dollars over the lifetime of the loan, according to Consumer Reports. So pay upfront if you can.

Article Source: http://www.rightarticle.com

Robert Woods has more than one interesting site- checkout his cool articles about home Business site and also his home business blog
This article is available as a unique content article with free reprint rights.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated