How to get a Mortgage
Purchasing your first home can be very intimidating. There are many mortgage loan options out on the market today and it is necessary to arm yourself with as much information as you can regarding programs and guidelines that best meet your needs. Educating yourself on the many different types of mortgage loans and mortgage programs is an excellent way to begin the home buying process. It is an extremely important decision and must be taken seriously by all parties involved including you. Purchasing a home is a financial and emotional commitment. Financially the term of your mortgage loan can extend over thirty years of your life. Emotionally your life takes dips and turns which is why it is important to educate and plan on what your monthly payments will be, how much you feel that you can afford, and what you will be comfortable with for a very long time. The first step in the mortgage loan process is a thorough evaluation of your financial situation. Your first step is to obtain a credit report to get a clear picture of your credit standing as well as finding out what your credit score is. Also, you will need to evaluate your bank statements because today's standards require consumers to a put money down on a home purchase. The amount of the down payment depends on the mortgage loan program you are eligible for.
There are many home loans that are available to meet the needs of the first time homebuyer. One of these programs that are most common is the FHA (Federal Housing Administration) loan. This program is specific to meet the needs of individual or individuals with moderate or low income with a more challenging credit history. FHA requires only 3 percent down payment, much less than the typical fixed rate home loan. FHA will also allow your down payment to be made by a relative or perhaps with some assistance. The approval process can also be more lenient than many other loan types, because the repayment is guaranteed by the federal government.
Conventional loans may be another option. These are typically Fannie Mae (FNMA) and Freddie Mac loans. They offer 30 and 15 year terms, fixed rates and adjustable rates. A fixed rate is the best route to go because your payment remains the same throughout the term of the loan, therefore you avoid any surprises.
These types of home loans are available by many different mortgage lenders. Make sure to invest your time and do the research before you sign any housing contracts or mortgage loan applications. Be sure to understand exactly what you are signing. Know your program and know your term.
