If you are a first-time home buyer, it is an exciting time to be getting into the housing market. Interest rates are low, and home prices are wa-a-a-ay low! And of course, money should be, and probably is, the most important consideration: How much money can you afford to spend on housing, and what will it buy you?
Lonnie and I can help you with the first question in general, and the second question specifically. But what we recommend is that you get some advice from a lender before you even start looking for housing on the Internet! And voila, Mistake No. 1: First-Time Home Buyers do not ask enough questions of their lender, and can miss out on the best deal.
We work with several lenders who have assured us they have plenty of money to lend, that there's even some 100% financing out there, there are still loans that are not credit-driven, et cetera. You may want to consult a couple of lenders and compare programs. If you are in a position to get a conventional 30-year loan, with a down payment, it is fairly simple to compare interest rates offered and closing costs: Ask the lender for a Good Faith Estimate.
If you are looking for a specialty mortgage, you need to get some answers regarding your monthly payment: Do they increase, and when, how much? Can you afford the mortgage when the payments increase? Does your loan balance get paid down every month or does it stay the same or even increase?
What is your plan when you buy the home? Statistically, people move after five years of living in a home. And then if you decide to move or refinance your home, is there a prepayment penalty.
If you need help making sense of lender language, contact us and we will be glad to help you understand the process.