First Time Home Buyer: Mortgage Tips You Must Know

House For Sale Sign

If you have an interest in purchasing your first home and are in need of a mortgage loan, this information is for you.

Obtaining your very first home can be challenging. Even more so if you are without the necessary information that will help you. Preparation is the key to success.

Most of the first-time home buyers will utilize a mortgage loan to finance the purchase of their first home. Property can be your biggest asset, but the mortgage loan is most commonly the largest debt experienced by homeowners.

For this reason, it is imperative that you learn as much as possible about these loans.

What is a Mortgage Loan?

As a home buyer, you will put a down payment of approximately 20% or more on the purchase of your first home. The remaining financing will come from the obtained mortgage loan.

This will cover about 80% of the total price of the home.

Once the residence is bought, you will make a monthly payment that includes both the interest and the principal in order to pay off the mortgage loan over a set time period.

In the United States, these are most commonly paid over a period of 30 years.

How Do I Get a Mortgage Loan?

You will need to apply for a mortgage loan through a bank or a credit union. There are other types of lenders that offer mortgage loans, too; an example is a mortgage broker.

Your financial situation will be analyzed. This includes your income, your debts, your credit score, and the amount that you intend on placing as a down payment.

An appraisal of the property will be conducted to ensure the value is as accurate as possible.

It may be possible that you will be required to pay upfront fees. Examples include filing fees, origination fees, and certain types of taxes.

Mortgage Loan Rates

Mortgage loans are distinguished as being “fixed rate” or “adjustable-rate”. The “rate” is the amount of interest charged.

If you opt for a fixed rate, that means that the amount that you pay for your principal and your interest stays the same each month, for the entire duration of the loan.

If you opt for an adjustable-rate mortgage loan, it means that the interest rate on the loan could fluctuate and your payments each month could go higher.

If you plan on residing in the home for a very long time, the fixed-rate loan is likely best for you. Otherwise, the adjustable-rate mortgage loan is best.

Let Us Help

Are you a first-time homebuyer ready for a mortgage loan? If you answered “yes”, we here at Somerville Bank can help you. We offer a variety of terms that are perfect for all budgets. Just contact one of our many loan specialists at a location near you to find out more.

To obtain a list of locations, follow this link: https://somervillebank.net/locations/