New homebuyers should ask as many questions as possible. Buying a home is such a big accomplishment that many people spend a lifetime trying to achieve it. New homebuyers should ask about the down payment, mortgage rates, and much more. Asking a real estate agent and or broker as many questions should be done before taking the first big step.
Down payments vary from lender to lender and city to city but they are similar in many ways. The ideal down payment is 20%, but if you don’t have the cash there is still hope. There are many first-time homebuyers grants and programs out there. Here is the top 4:
FHA home loans are so flexible that even a person with a poor credit score of 580 can still qualify with 3.5% down.
Just like the hidden fees, credit cards have in fine print down payments do too. In the disclaimer, you will see that the ad says, “This is the best possible rate”. This is the equivalent of lower credit card rates for people with excellent and higher rates for people with poor credit. For the best results, you will need to have a high credit score and a low loan-to-value ratio.
This might be one of the most common questions first-time home buyers and renters have. There is no one-size-fits-all loan option; good research is necessary on your part. Here are some pros and cons of a 30-year fixed-rate mortgage:
An adjustable-rate mortgage could make sense if you plan to move soon or can’t afford the fixed rate. Obviously, a 15-year loan is an option if you have extra cash laying around to cover monthly bills.
In most cases when the buyer can’t afford a 20% down payment you’ll be stuck paying for Private Mortgage Insurance also known as PMI. PMI protects the lender if the buyer isn’t able to make the monthly payments.
If you are not able to make your monthly payments on time your account will become delinquent and will bring your credit score down. Letting your lender know you can’t make your monthly payments will help so he or she will help you qualify for a ‘grace period’ or even forbearance.
If you still can’t make your payments after that your home will be repossessed, your lender will sell to get the money to repay the debt.
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