5 Things Every First-Time Home Buyer Should Know

Purchase a Home with Just 3% Down – It is common to think that a 20% down payment is required to purchase a home. Depending on your purchase price and credit score, you can now get a Conventional loan with only 3% down. FHA mortgages, which are insured by the government, only require 3.5%.
Lenders can help pay for closing costs – Closing costs can be grouped into lender related costs and settlement related costs. Lender related costs can often be waived but did you know lenders can also offer credits to help pay for 3rd party settlement costs like title insurance, attorney fees, and government recording charges.
ARMs are your friend – If you plan on staying in your home for less than 10 years, a 10, 7 or 5/1 Adjustable Rate Mortgage or ARM is a great way to keep a low monthly payment.
Interest rates are still low – With domestic and foreign political tension, mortgage rates have been the beneficiary. Although interest rates are off their historic lows, the average 30 year fixed rate still remains below 4%.
Learn the Lingo – Mortgage loan originators and underwriters use key ratios to determine your eligibility. Debt-to-income ratio or DTI is your total monthly debt payments divided by your gross monthly income and used as a measure to determine your ability to repay the loan. Loan-to-value ratio or LTV is the loan amount as a percentage of the total value of the home and used as a measure to determine mortgage insurance requirements.
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