Often, first time home buyers don't have the resources to get a regular mortgage, which is why there are first time buyer mortgages. If you are a first time buyer, you may be confused because there is more than one type of first time buyer offers out there, and it is important to choose the one that is going to help you out the most.
One thing that many first time buyers get offered to them is the opportunity to pay a lower down payment on their new house. Most first time buyers just don't have the required 20% of the purchase price of the home saved up. Some banks are allowing their first time buyers to put down just 5% or 10% of the price before they move in.
Whether or not taking the bank up on this type of offer is a good idea is going to depend on several things. It is going to get you into your house a lot sooner, so you won't have to save for a long time. This convenience comes with a price because most banks will make you carry a private mortgage insurance to reduce the risk. That means that instead of putting more of your payment to your actual loan, some of it is going towards this insurance. Plus, having a reduced down payment might lead you to believe that you can afford a more expensive house than you really can. This could spell trouble in the future.
Some banks are going to offer first time buyers the opportunity to have a lower rate interest on their mortgage for a fixed period of time. This may help the first time buyer because they will be able to have a lower payment for the first year or six months of their mortgage. It can also cause a lot of problems because first time buyers get so used to the low payments that it is hard to adjust when the lower interest goes away.
First time buyers need to plan for the higher interest rates. The ending of the introductory rates can put a serious crimp in their budget. You may have even promised yourself that you are going to save that extra money every month. The promise is broken when you end up spending that money on a new sofa.
When you take out your first mortgage, some banks are going to offer these customers a no-closing fee mortgage or another gift. They offer you all of this because they want you to come back again and again.
First time buyers have power when getting their first mortgage, but they also have stress. The stress comes from the pressure to get a mortgage that is too expensive, because the banks will make more money in interest. The most important tip is to make sure that you can afford it when getting your first mortgage. - 18193
One thing that many first time buyers get offered to them is the opportunity to pay a lower down payment on their new house. Most first time buyers just don't have the required 20% of the purchase price of the home saved up. Some banks are allowing their first time buyers to put down just 5% or 10% of the price before they move in.
Whether or not taking the bank up on this type of offer is a good idea is going to depend on several things. It is going to get you into your house a lot sooner, so you won't have to save for a long time. This convenience comes with a price because most banks will make you carry a private mortgage insurance to reduce the risk. That means that instead of putting more of your payment to your actual loan, some of it is going towards this insurance. Plus, having a reduced down payment might lead you to believe that you can afford a more expensive house than you really can. This could spell trouble in the future.
Some banks are going to offer first time buyers the opportunity to have a lower rate interest on their mortgage for a fixed period of time. This may help the first time buyer because they will be able to have a lower payment for the first year or six months of their mortgage. It can also cause a lot of problems because first time buyers get so used to the low payments that it is hard to adjust when the lower interest goes away.
First time buyers need to plan for the higher interest rates. The ending of the introductory rates can put a serious crimp in their budget. You may have even promised yourself that you are going to save that extra money every month. The promise is broken when you end up spending that money on a new sofa.
When you take out your first mortgage, some banks are going to offer these customers a no-closing fee mortgage or another gift. They offer you all of this because they want you to come back again and again.
First time buyers have power when getting their first mortgage, but they also have stress. The stress comes from the pressure to get a mortgage that is too expensive, because the banks will make more money in interest. The most important tip is to make sure that you can afford it when getting your first mortgage. - 18193
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