Mortgage Tips for First-Time Homebuyers
For many first-time homebuyers that are used to renting, ownership, and preparing to buy a home, is a whole new ballgame. But with a little education, preparation and planning, first-time homebuyers can understand the benefits of owning versus buying. Here, Libertas Real Estate offers some mortgage tips for first-time homebuyers,
First of all, there shouldn’t be any intimidation surrounding a mortgage — it’s simply a type of loan that homebuyers can get from a lender that allows them to purchase or refinance a home. A mortgage loan is a way to help people achieve the American dream of homeownership even if they don’t have the entire sum of cash up front, which, in reality, most first-time homebuyers don’t. Even in the case where one might have all the money to pay off the home, there are cases when mortgages are still used. It all depends on individual circumstances.
First-time homebuyers will need to apply for a mortgage loan. One of the best things they can do prior to beginning their home search with a Realtor is to get pre-qualified for a mortgage loan. This will make the buying process go much more smoothly and help ensure no time delays when a homebuyer finds their dream home.
There are specific eligibility requirements lenders need to provide a mortgage loan. Going through the prequalification process can also help first-time homebuyers develop a realistic budget for their home based on a mortgage calculator which can help them determine their monthly mortgage payment. This simple step can help first-time homebuyers narrow down their search by simply knowing how much they can comfortably pay towards their monthly mortgage.
In order to obtain a mortgage loan, homebuyers will need to apply but also be prepared to provide specific financial background and information such as current income and credit score. Once approved, the homebuyer essentially agrees to pay back the loan over a period of multiple years (the most common mortgage term length is 30 years), plus interest. Interest rates fluctuate with the market and also can be determined by the lender based on the level of risk to lend the money. This is ultimately based upon the homebuyers’ credit report and other financial factors.
First-time homebuyers will also need to be prepared to make a down payment to get a mortgage loan. In general, the more borrowers are able to put down initially, the better terms they will be able to attain, which can also equate to a lower monthly mortgage payment. Once again, these are very individualized circumstances, so it’s a good idea to work with a trusted and experienced Realtor that can offer their advice throughout the process.
Potential homeowners should know that there are multiple options and ways to make their dreams of buying a home a reality. Libertas Real Estate agents are here to make those dreams come true and to lead first-time (as well as experienced) homebuyers through the process.