What kind of first time buyer mortgage do you need? If you are purchasing a home for the first time, either a house or an apartment, you will either have a fixed rate mortgage, or an adjustable rate mortgage. Both types of mortgages come with different advantages and disadvantages. First time buyer mortgages are influenced by what kind of mortgage you select. If you want to know what is best for you, here are several tips to help you make your decision.
Fixed rate mortgages offer stability. With a fixed first time buyer mortgage, your interest rate won’t change for the life of the loan. With an adjustable rate mortgage, you can enjoy a lower initial payment, but the interest rate may change over time. For first time home buyers, this is a great option.
Another thing you’ll want to consider is whether to get a first time buyer mortgage or an existing loan. You can save quite a bit of money with an existing loan. The biggest advantage of an existing loan is that the existing home pays off the first time buyer mortgage. This means you don’t have to start repayment until after the first home sale. You’ll also have peace of mind knowing that the payments for your first home are already budgeted for.
However, there are some drawbacks to fixed rate mortgages. One disadvantage is that borrowers usually pay more in interest over the life of the loan. Some financial experts argue that it’s not always the best option for first time buyers because of the potential lack of financial security. For first time buyers who want to take advantage of low interest rates, fixed rates mortgages provide a great opportunity to secure financing without financial risk.
In addition to getting a first time buyer mortgage deposit, you’ll also be responsible for paying closing costs. These fees can run as much as one hundred dollars per month. Depending on the lender you choose, you may also be responsible for paying property taxes, insurance, property appraisal and other fees. If you can afford a lower interest rate, you may be better off choosing a different type of loan for your first time home buyer deposit.
As mentioned earlier, lenders offer a variety of loans for first time buyers. Two of the most common options available are adjustable rate mortgages or fixed rate mortgages. With either option, you’ll make a down payment that determines the amount of interest you pay over the life of the loan. Lenders calculate this amount using current interest rates. Most buyers prefer to pay a lower interest rate in order to reduce their overall debt as soon as possible.
While fixed rate mortgages offer the security and stability, they tend to be more expensive in the long term. During times when the mortgage market is unstable, adjustable rate mortgages (ARM) provides flexibility. However, they come with higher monthly interest payments and can often be risky. To determine whether or not you’d be better off with an ARM or fixed-rate mortgage, consult your financial advisor.
The best first time buyer mortgage deal may not be offered by your local hometown lender. Instead, you should look online to find the best deal you can. There are many national home loan and finance companies who have established web sites that allow you to apply from your own computer. They will provide you with many different mortgage offers, all based on your credit and financial history. After you apply, you should be able to quickly receive a quote for the home loan or refinance you are considering.