Tips In Purchasing Your First House Like An Expert
Owning a home is part of the American dream. Whether you were born here in the United States or you migrated in the county, most probably you would want to have a house to call your own. In the early 1900s however, it was said that only ten percent of Americans have their own homes due to the cost of purchasing one. It was only in the 1930s when house mortgages were introduced that many family’s dreams were fulfilled.
Nowadays, taking out a house loan is easy and very convenient. As long as you comply with the requirements, and you have the means to pay your monthly, then you can easily decide to purchase one. There are also many different mortgage lenders Houston TX to choose from that would meet your needs and make payment easier for you.
However, before taking out a mortgage loan, it is best if you prepare for it the best way you can to prevent any future problems. You will be paying the loan for many years and thus, many things could happen so you must make sure you can complete the term of the loan if you don’t want the house to be repossessed in the future. Here are some essential tips for first time home buyers such as yourself to ensure that you are indeed ready to make your first home purchase.
Prepare Your Down Payment
The usual down payment for mortgage loans is twenty percent. However, if you are a first-time home buyer, lenders may offer you as low as three percent of the cost of the property. Yes, at first glance, you might see it as an easy way for you to get a house. Maybe you even have the money already for the down payment. But, you have to remember that the lower you put down initially, the higher your amortization will be. And high balance means, high amount to calculate on your interest. It might give you a difficult time in the future especially when it comes to your payments.
Explore Your Options
You have to remember that there are many types of mortgages for you to choose from. All of these have their advantages and disadvantages, so you need to select according to what fits you. If you are not familiar with them, here are three of the most common types of the mortgage loan.
- FHA Loans
- Conventional Loans
- VA Loans
Federal Housing Administration (FHA) are types of mortgage loans insured by the said administration. It requires the borrower a down payment of as low as 3.5 percent only. If you have decided to go with a lower down payment, then this option suits you.
These types of loans offer the lowest down payment of three percent for first-time how buyers. It conforms to the standards set by Fannie Mae and Freddie Mac which are government-sponsored agencies.
Do you know that there are housing loans that don’t require any down payments at all? Yes, that is right. If you are interested in one, then check for loans guaranteed by the Department of Veterans Affairs.
Search for Loan Assistance
If you are a first-timer, it is best to try and search for different states assistance programs as they often offer not just lower down payments, but they can also assist you with the closing cost, discounted interest rates, and tax credits.