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Excellent Deals for First Time Buyer Mortgages

Buying your first home is an exciting time, first time buyer mortgages are readily available. Most first time homeowners are young and often can be taken advantage of, it is important you do some research. With the real estate markets we have today across Europe and North America it really is a buyers market. Governments are also looking to get people to put their money into the economy and will often promote home ownership. Subsidized first time home buyers can often receive excellent interest rates and some very appealing tax rebates depending on your location.

Doing Your Homework To Get The First Time Buyer Mortgages

Buying your first home should not be a quick and easy process. You need to do your homework, and make sure you are not getting in over your head. Do you want a 30 year fixed loan, or a 20 year mortgage that is variable? Do you want to pay monthly, or accelerated bi weekly? How much can you borrow, and still live comfortably? These are very simple yet important questions you need to answer first. Many, many first time buyer mortgages are much to high in comparison to the income the buyer makes. Often, first time home buyers get in over their head and have no recourse in the event of emergency, job loss etc.

When you buy your first home it is a good idea to make sure the mortgage is insured. Again, depending where you live this may be mandatory. In Canada for example they have what is called CHMC, in the US they have what is called HUD which stands for housing and urban development. Many buyers opt to find their own private mortgage insurance in order to save a bit of money. Some companies may also provide down payment assistance depending on your situation and credit score. Most mortgages will also incorporate your property tax as well, this is one less annual payment you need to make and is simply added to your mortgage payment.

Going for HUD Home

Most first time buyer will have a higher interest rate, or will require the buyer to put down a considerable down payment. Depending where you live some housing and community development programs can help you with this. If you are looking to buy a HUD home, there are many tax breaks and buyer rebates available. Some may also require a lower down payment, it is always a good idea to consult the HUD funded housing counseling agencies in your area, they may be able to provide you with a low interest loan that will assist you with a down payment for your purchase.

Zero Interest Home Loans

There are a number of home loan schemes that are sponsored by the government that allow you to take advantage of low down payment schemes. You can even opt for a scheme that gives you down payment assistance. If you are eligible for one of these schemes, you can truly get a home loan at zero down payments.

Just to give you the flavor of such a scheme, there are financial institutions out there offer a program where a prospective owner puts up 3% of the cost of the house from his own resources (not a gift or a loan), he then needs to qualify for a regular home loan from a home loan agency. This has to be on the borrowers own merit and he must qualify for a loan like everybody else. From the participating loan agency, the buyer borrows 55% of the cost of the home. Then, and here is the good news, he gets 40% of the cost in the form of a zero interest second mortgage from the Illinois Housing Development Authority and the Federal Home Loan Bank.

The second mortgage is at zero interest and can be for up to 30 years. This makes it really easy for a person to acquire a home and save tens of thousands of dollars in the process.

The good news does not end here, the buyer is also given a grant of $2500 towards closing costs. If the buyer stays in the house for five years, this is also waived off.

There is more to follow! Participating lenders waive off document and other fees, saving you around $400 and other incidental expenditure is reduced by around $100. As the man said to his friend, a dollar here and a dollar there and soon we are talking real money!

The key to the entire process is good credit. If you are a first time home buyer and have good credit, then you may be in luck. In addition to this, there are no median income restrictions and there are no first time homebuyer education requirements that need to be met. The example I gave above was just one of the dozens of such programs.

People buying homes in rural areas can avail of special incentives! You can avail of a rural housing service loan that can help you to acquire a home in areas that would otherwise not be approved. In fact, you can get 100% of the LTV based on the appraised value of your home. You can even opt for pre-fabricated (manufactured) housing under this scheme! There is no down payment and you do not have to show any cash reserves at all! This makes this a great option for a first time home buyer.

There is no dearth of schemes for a person who has a burning desire to own his/her own home. User-friendly schemes and hundreds of options ensure that there is something that is just right for you.

Phillip
 

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