House hunting and house buying has many levels. For a first timer you have a lotto learn very quickly if you want to buy. You will spend more if you go in unprepared. So, looking at all the different aspects of buying your home will help you get a better deal. When you make smart positive decisions in all areas of the home buying process you could save yourself more money than you could imagine down the road. You will be making those agreed upon payments for a long time and every little bit helps thurner und söhne.
There are a whole bunch of different ways to finance your house and each one has a ton of tiny details. You will need more than just a general idea for this. Your mortgage will stay with you for a very long time and it will probably be the biggest payment that you make each month all that time. You want to get the best interest rate that you can. That will take some looking around. The interest rate can change sometimes too and you need to be prepared for that.
You have to understand how much of your houses value can be financed before you will know what amount you will need. There is a loan to value ratio. It will affect your interest rate and if you will need mortgage insurance or not. If you have higher than 80% LTV you will likely be required to have that insurance. The higher the ration the lower your down payment. For example on a 100,00 dollar house with a 95% LTV loan you will need to come up with 5% of that 100 thousand for your down payment.
You have plenty of different loan types to pick from. All have their pros and cons. The most popular are fixed rate loans and adjustable rate loans. The fixed rate gives you the current interest rate or what you and your lender agree on. The payment will stay the same for the entire life of your loan. This is nice because you don’t have to worry about your payment changing. If the rates go down considerably you can always refinance. The adjustable rate mortgage changes whenever the current interest rate changes nationally. It does have limits though to how many points it can go up or down. Most folks will pick a 30 year mortgage but you can do one for 15.
There is also the option of a balloon mortgage. These are risky, but they have been used well by people that buy a home, fix it up and then sell it. You will get a super low rate for when you initially have the home up until a fixed period of time, 5, 7, 10 years normally. You will then need to pay off the entire amount. That is why it is risky because if you have not been able to sell it in that time you could be in trouble. No matter what type of loan you get you can always pay off a little extra each month. It will make a big difference after a few years.