The housing market as well as mortgage lending rules have gone through lot of changes in the recent times. Though certain traditional mortgage advice will still remain the same, buyers have to be savvy enough when they want to buy a property and take out a mortgage for the first time.
Here are 4 tips which might be of great help to first time buyers when they plan to buy a property:
1. Loan type: Though conventional and FHA loans, both are available, FHA loans which are insured by the Federal Housing Administration is a common choice for first time homebuyers. FHA loans have reasonable rules and guidelines and require low credit score and down payment. Such loans are available at a down payment of 3.5%. However, in the recent times, FHA has increased the annual premium for mortgage insurance. Conventional loans with PMI (private mortgage insurance) can be a cheaper choice for first time homebuyers.
2. Good faith estimate: The government has made it mandatory for the lender to provide the borrowers with a good faith estimate. All the required fees that a borrower needs to pay during the closing are listed in this disclosure form. It is very important for the first time homebuyers to go through this disclosure form and check out all the fees. He/she should question the lender if any of the fees seem to be too high.
3. Check out online photos carefully: What you see in the photos may not be true. So, it is better to scrutinize the online photos carefully. Due to the camera angle, the room may appear to be big enough, but if you scrutinize, you may find two small windows within a small distance which means that the room is not that big. Similarly, colorful towels in the washroom may give it a bright look but if you remove the towels, you may see the unkempt walls. So, don't just go by the photos, go for a personal inspection.
4. Leave out the first house: Property values have declined in the recent times and thus some very beautiful houses are available at a lower price. Thus, don't jump in for the property that you see first. Traditionally, first time buyers used to go for traditional small houses located in a less desirable neighborhood. But things have changed now and first time buyers can afford to look out for better properties now.