Mortgages and Home Loan Options for First Time Home Buyers


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William Wagner is a digital content specialist, passionate writer, and blogger. William is currently working in Strive Lending, a veteran owned and operated mortgage lending company for veterans.


Out of the existing home sales today, more than thirty percent is accounted to first time home buyers. Reports and data had shown that this figure is likely composed of millennials shifting from renting to owning homes. This trend is expected to continue until the year 2030.

As first time home buyers, there are certain problems that need to unlock first before the road to homeownership title happens. Aside from finding the perfect location where you want to build your dream home to financing your purchases, getting an approval for a mortgage should be the top of your priorities.

While there are few home loan options for you out there, one cannot be sure if he/she will get the key to homeownership immediately. Given the fact that you need cash for the down payment, choosing the right deal with favorable rates for you is a task you need to take. You can even ask the help of an attorney in making your decisions so that you will be sure to make the right ones.

Using Bankrate, you will be able to adjust loan purchase according to your own preference. Take for example a 30 year fixed mtg, Bankrate will then suggests what lending company should you go. For a home located in Los Angeles, California with a loan amount of $300,000 and 5 percent down payment, you can get to either Sebonic Financial or Consumer Direct. Bankrate will also help you determine the exact or expected monthly payment. For a 30 year fixed mtg, monthly payment should be close to $1,436.

When you happen to think that it is about time to take advantage of home sales now, here is a simple step by step plan for first time home buyers:

Always check the selling prices – Buying a home should be like buying a pair of shoes. You should know what are the selling prices of comparable homes where you want to build your dream home. Do a quick research of actual home listings in your area, websites maybe, and the National Association of Realtors including.

Bankrate’s Mortgage Calculator – You should check them on the web. Bankrate will help you determine the chances of getting your own home. Bankrate’s Mortgage Calculator will help you get an idea how much your monthly mortgage payment if you buy today. The process was already discussed above.

Double check how much your monthly housing will cost – Aside from monthly mortgage payment, taxes, and home insurance are not yet included. Some areas have different rates. It will be wise to know these things beforehand.

Determine the closing costs – It would be best if you will be able to project how much is the overall spending. Settling your own home also includes other payments like origination charged by the lender, settlement and title fees, insurance or homeowner’s association fees, and other taxes.

Check your budget – Your budget will determine the kind of house that fits for you. When you are going to borrow money from conventional loans, you have to options: Fixed Rate or Adjustable Rate. Your budget will help you determine which option you should go.

Fixed Rate Mortgage Loan means a fixed interest rate for the whole repayment term. Month after month, the amount of your payment will neither increase nor decrease. It will always stay the same until such time your loan term expires. On the other hand, an interest rate is not fixed and will change every year is called Adjustable-Rate Mortgage Loans.

The decision to what type of conventional loan one will get should solely based on the amount of money allocated for home building and the monthly salary of the lender.  

Start looking for a reputable Realtors – It would be best if you find a trustworthy real estate agent in your area. The two of you should start talking when is the right time to purchase a home.

Prepare for unexpected events – Since you are buying your own home, you should be ready for other expenses like purchasing a new set of appliances, plumbing problems, and other repairs. It requires a lot of work on your part. That is why it is important that you can project that these things might happen sooner or later.

Check your credit – Before going to the path of homeownership title, make sure to check your credit report and score first. It would be better if you do not have any pending or unresolved issues before entering the home buying process.

Collect the necessary documents – Do not be surprised that your lender will ask a lot of documents from you for the past 2 years or so. Start collecting pay stubs, tax returns, bank account statements, and other related documents that your lender might be needing. In doing so, you will get a closer chance of getting your mortgage loan approved.

First three trials but still fails?

Are you having a hard time getting an approval from your lender? Do you feel that you have no luck in banks or in other conventional loans? Then maybe it is now time to get some help from the government.

Consider getting help from the Federal Housing Administration is available for first time home buyers and other types of home borrowers. For first time home buyers, FHA loans are very generous in giving as low as 3.5 percent down payment. In exchange for that, you will have to pay for mortgage insurance which increases the size of your monthly payment.

Other government loans are available but limited to military service members and their families. Veterans Affairs Loan, also known as VA Home Loan, offers no down payment with flexible and favorable VA mortgage rates according to your desire. The eligible borrower will receive a 100 percent financing assistance no cashout or whatsoever. VA Home loan is backed and guaranteed by FHA.


We know for a fact that setting your own home will consume a lot of energy and money from you. That is why you need to plan every single detail to make your homeownership title come true without any complications. While there are a bunch of hurdle along the way especially for first time home buyers, there is a lot of options available to choose from. 

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