First Time Homebuyers

First time homebuyers are, amazingly enough, those people buying a home for the first time. If this is the situation that you are in then a little bit of advice might come in useful, as the process can seem horribly complex. The first and most obvious thing is that almost nobody buys a home with money they already have. They’re simply too expensive to pay for out of the checking account. So you’ll need to take out a loan to buy a house. This is called a mortgage: also known as a secured loan. If you don’t repay the loan then the lender may take your house from you. Simple as that.

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The second thing that first time homebuyers need to know is about all the different types of mortgages, ARMs, FRMs, reverse amortization, 100% financing and so on, things explained on other pages here. All of the different variations offer something to people in different situations. Some are cheaper in the short term, others reduce the cost over the next 30 years, some give greater flexibility, others greater stability. The actual process of getting a mortgage is sufficiently complex that you will need to use a financial professional to do it, but their greatest value is in being able to explain all of the options, their benefits and risks, to you.

One more thing for first time homebuyers. Obviously, if you are applying for a loan someone is, at some point, going to take a look at your credit record. It’s therefore a very good idea to become pre-qualified for a loan. What this means is that instead of searching for a house which you think you can afford, then applying for a loan, you should first speak to a mortgage broker to find out how much you will be able to get a loan for. Then start looking for houses in that price range.