Loan Advice for New Home Buyers

​If you feel that you are wasting money on rent every month, you may be looking into buying a home. Because of the deflated economy, interest rates are presently very low, and the government is offering many incentives to encourage first-time home buyers. These benefits include tax breaks and special loans to make the home-buying process less burdensome.

Any potential home buyer must figure out where he or she will obtain the money for a home. For first-time home buyers, there is a special loan called the FHA loan. Through this loan, the buyer makes only a 3.5% down payment, and the monthly payments are lower than many other loans.

Through an MIP funding fee, an FHA borrower also gets a lower insurance rate on the loan. Best of all, this loan does not require a great credit score. Even if your debt to income ratio is high, you can be approved for an FHA loan. The government is trying to stimulate the economy through the real estate market, so this is a relatively easy time to buy a home.

Some mortgage companies specialize in FHA loans. If you are a potential first-time home buyer, find one of these companies, as they will know exactly how to get you the most optimal rate. They will have extensive portfolios in helping people like yourself, and they will often offer better rates than general mortgage companies.

Before you go to any mortgage company, however, analyze your finances and make sure you are ready to buy a home. Account for any potential changes in your financial situation, and make sure you would have enough money saved to make payments in case of an emergency.

Defaulting on a mortgage is a very serious blow to your credit and financial future, so weigh your options carefully.