Common Mortgage Questions for First Time Home Buyers

Allison Beatty
LoanBiz Columnist


First time home buyers experience many emotions as they weed through the mortgage process. One common emotion is confusion, as they try to understand all the mortgage options.

Some common questions of first time buyers who have no previous experience with mortgages are, "how do I find the right mortgage lender," and "where do I start looking for a loan?"

Here Are Steps to Take:

• Ask friends, co-workers and relatives for names of reputable mortgage lenders.
• Interview 3 to 4 mortgage companies or mortgage brokers (who shop around with several lenders to find you the best mortgage) and ask questions about their mortgage loan programs, services and fees.
• Look on the Internet for mortgage lenders who offer competitive loan programs geared toward first time home buyers.

How Much of a Down Payment Do I Need as a First Time Home Buyer?

The good news is that there are many loans that require as little as 3 percent down. While it always helps to put down as much as possible, don't be concerned if your loan down payment funds are limited.

What Types of Mortgage Loans Are Available?

There are so many mortgage loans available today that it can make choosing a challenge. Look for a loan that focuses on first time home buyers and their special needs (E.g., funds for the down payment; limited credit history). Among the popular loan programs are:

• FHA loans with low down payments, low closing costs and easier qualifications.
• Loans for buying and fixing up a house in one.
• Loans for manufactured housing and factory built homes.

Do I Have to Be Pre-approved or Pre-qualified For a Loan?

It is best to be pre-approved for a certain mortgage loan amount prior to shopping for homes. This will give you a realistic view of what you can afford, so you can shop accordingly. A prequalification is not as detailed, and does not carry as much weight with home sellers.

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.