Helpful Advice For First Time Home Owners

By: Peter Smith

One of the biggest investments you will ever make is purchasing a home. It can take over thirty years to pay that mortgage and because of the interest on your loan you will pay back almost double the amount of money you actually borrowed. So before you venture into the first time purchase of a home, make sure that you actually understand what you are getting into with your mortgage.

Here is helpful advice for a first-time homebuyer:

Take the time to understand exactly how big a mortgage you can actually afford. You never want to cut yourself short on money each month. Remember owning a home is not just about the monthly mortgage payment, but there are property taxes, home owners insurance and general maintenance, so make sure that you can afford the mortgage payments along with everything else that comes along with owning a home. Do not allow you bank or real estate agent to try and talk you into a bigger payment then you are comfortable making, remember they are not the ones that have to make all the payments.

Run your credit report before you apply for the mortgage. This way you can clean up any potential problems or fix any errors on your report. Due to new laws you can obtain a free credit report from all three the major reporting agencies.

Gather all the paperwork that the bank will need. They will usually want to see 2 years worth of tax returns, proof of income, and documentation of how you plan to pay for the down payment on the home.

If you have a good relationship with your bank try them first for your mortgage, they may give you the best interest rates and fees for your first mortgage. Keep them honest though, check a few lenders online or at other local banks to see what terms work best for you.

Read all the terms and conditions of the loan very well and do not assume anything, if you have a question; it is your right to ask.

Get a break down of your closing cost. This is the amount of money you are required to bring with you at the closing. It will usually include things like your loan application fees, lien recording fees, surveys, appraisals, government documentation stamps and a host of other regulated fees. The closing cost can be rather steep, so get an estimate to avoid being shocked when you get a call a few days before closing telling you to bring a cashier's check for $12,000.

If you are a first time home buyer, take your time. Do not rush into anything when buying your first home. Make sure that you can afford the mortgage and be patient; mortgages take a while to close so be prepared to wait.

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