Mortgage Financing for First Time Home BuyersAllison Beatty
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If you're a first time home buyer, you're probably feeling a little overwhelmed by the mortgage process. How much home can you afford? What type of mortgage is right for you? Here's a primer on options for first time home buyers.
Do Mortgage ResearchBefore shopping for homes, make sure that you do some research into interest rates and what your mortgage payment would be. Many Web sites have mortgage loan calculator, with some especially designed to help first time home buyers understand their options. Look for:
- Tips on how much home you can afford.
- How the down payment amount affects your mortgage.
- What your debt ratio should be.
- Mortgage lenders guidelines on income levels, employment history, etc.
Special Mortgages for First Time Home BuyersIn recent years, mortgage lenders have added many affordable mortgage options designed to get first time home buyers into their first homes. Among the possible mortgage features are:
- Mortgage down payment assistance
- Low loan rates
- Some reduced mortgage fees
- Lower down payment options
Down Payment Assistance for First Time Home BuyersWhile a 10 percent home mortgage down payment is nice, it often is unrealistic for first time home buyers. Many mortgage lenders recognize this and offer mortgages with a 3 to 5 percent down payment option. This will help you get into a home quickly, but realize that:
The Mortgage Application ProcessWhen applying for a mortgage, you'll need to bring the following information and documents:
- The last two to three pay check stubs.
- Information on your rental history and any long term debts.
- Your driver's license.
- Recent bank statements.
- Tax returns for the past two years.
U.S. Department of Housing and Urban Development
About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.