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A Quick Guide to Getting your First Mortgage


If you’re a first time home buyer, then you have some advantages over other home buyers, because you don’t have to sell a house before you can move into the housing market. Mortgage lenders happily seek out first time home buyers, and many governments provide either grants, tax incentives, or both to encourage first time home buyers. Governments are eager to help first time home buyers, because home ownership is good for the economy.

Before you start searching for a home to buy, you should know what your mortgage loan ceiling is. The size of mortgage you can get depends on your income and your credit score. You can get an idea of what this number is with any number of online calculators, but your bank or lender will tell you exactly how much you can borrow. The monthly payment will be calculated so as not to exceed a certain percentage of your monthly income.

It is a good idea to shop around before settling on a mortgage lender. Even small differences in interest rates can add up over the life of the loan. Consider other fees, as well as terms for contract termination, should you want to refinance or be able to pay off the loan early.

You will also need to come up with a down payment, which will equal a certain percentage of the purchase price. The bigger the down payment you can make, the smaller the mortgage, and the sooner you’ll own your home free and clear. In addition to coming up with the down payment, you will also have to fund expenses like closing costs, and deed registration fees.

Next comes the exciting part: looking at properties. Look at a wide selection of properties in your price range. Fortunately, today you can do a lot of searching online, including video tours. While you shouldn’t have your heart set on a property solely based on an internet video tour, you can use such tools to help you rule out homes you know won’t suit you. This can save you a lot of time. Other time saving devices include home search apps for the iPhone and Android phones that can search by area and price range.

When you make an offer on a property, make it contingent on the house passing a home inspection by a licensed home inspector. This can save you from making a costly mistake and sinking money into a house that has hidden structural, electrical, or other problems. Make sure any problems are addressed to your satisfaction before the closing.

After you close on the house you’ve chosen, be sure to keep copies of all the documentation in a safe place. You’ll want to keep banking records to help you take all tax advantages that you’re entitled to. You’ll also want to talk to your real estate agent and neighbors to put together a list of plumbers, electricians, and handymen who are reliable and trustworthy so you’ll know who to call when it comes to maintenance and upkeep on your home. Owning a home is exciting and can be a great investment, particularly if you know all the tax advantages home ownership gives you.