The Top Frequently Asked Questions of First Time Home Buyers

For first time home buyers, thinking about the long and detailed process of buying a home can result in stress and overwhelm. If you just started this process, you will need to know the answers to some critical questions if you want to ensure a smooth and uneventful journey.

Here are the top FAQ’s to which first time buyers should know the answers:

How much mortgage can I really afford?

You may want a 3,000 square foot, five-bedroom colonial but your bank account may tell you different. Based on your debt, you will be approved for a mortgage amount proportional to what you can afford. If you are not sure of how much house you can afford, use this mortgage calculator. It will give you an estimated home purchase price based on your debt and outgoing monthly payments.

Once you know the price range of the home you can afford, you can calculate your estimated monthly payments.  Research the current interest rates and plug these numbers into a mortgage payment calculator. Other factors will affect this number such as utilities, property taxes and homeowners insurance and these estimated payments should be added as well to provide you with an estimate as close as possible to your actual future payment.

Should I continue to rent?

If you are like most Americans, you want to live the American dream and own a home. When you rent, every check you write to your landlord is money you will never get back. When you own a home, every monthly payment, though some is interest, will be applied to your home. And every month you earn more equity and get closer to paying off your mortgage. An additional benefit is the savings you will receive from deducting your property taxes and your mortgage interest from your federal income tax every year.

Another benefit to owning a home is the ability to remodel and design as you please. No more white walls and boring style. The sky is the limit and you can redecorate as much as you want.

How much money will I need to come up with initially?

This number will depend on the mortgage product and cost of the house. Generally, you will need a down payment and closing costs. The closing costs are usually 3-4% of the home price while the down payment should be at least 10-20% of the purchase price, which is what lenders like to see as a guarantee that you can afford to buy the house. These requirements are often too steep for first time homebuyers so many turn to the Federal Housing Administration (FHA) for help. With an FHA Loan you are only required to put down 3.5%.

Questions? We are experts in providing first time home buyers with the right mortgage products that fit their budget. For information and questions about FHA Mortgages or any other mortgage products contact one of our experienced mortgage consultants at 888-790-0292. Or get a free Express Quote right now!

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