With rates on the rise, you might be looking to fast-track your purchase by getting a mortgage. Locking in a rate now protects you from rate increases in the future, but it can take time and effort.
Obtaining a mortgage is a crucial step in purchasing your first home, and there are several factors for choosing the most appropriate one. While the myriad of financing options available for first-time homebuyers can seem overwhelming, taking the time to research the basics of property financing can save you a significant amount of time and money.
Understanding the property’s market and whether it offers incentives to lenders may mean added financial perks for you. And by closely examining your finances, you can ensure that you are getting the mortgage that best suits your needs.
A mortgage is a loan used to purchase or maintain a home, land, or other types of real estate. The borrower agrees to pay the lender over time, typically in regular payments divided into principal and interest. The property then serves as collateral to secure the loan.
Conventional Loan
Jumbo Loan
Government-Insured Loan
Fixed-Rate Mortgage
Adjustable-Rate Mortgage
Finding the right mortgage for your needs can be challenging if you’re looking at it from a first-time homebuyer’s perspective. Financing options can also be overwhelming for first-time homebuyers, so take your time understanding and deciding how much you need and then find the right lender. If you can afford to put down a substantial amount or have enough income to create a low Loan-to-Value ratio, you will have more negotiating power with lenders and the most financing options. If you push for the largest loan, you may be offered a higher risk-adjusted rate and private mortgage insurance.
