First-Time Home Buyers’ Guide: The Basics of a Mortgage

Buying a home for the first time can be daunting, to say the least. There are a lot of decisions to be made and factors to consider especially when it comes to selecting an affordable mortgage. Overwhelmed? Don’t worry—we’ll make it easier for you. We’ve put together this guide to mortgage loan services to help you save money in the long run.

Getting to know your options.

There are different types of mortgage loan services, but not all of them will be the right fit for your situation. If you are having difficulty putting together enough funds for the down payment, consider the following loans:

• FHA loans – The Federal Housing Administration has insured loans that allow down payments that are as low as 3.5 percent.

• Conventional mortgage – These comply to the standards set by Fannie Mae and Freddie Mac, government-sponsored entities. Down payments can be as low as three percent.

• VA loans – The Department of Veterans Affairs guarantees these loans, and in some cases, they will not require a down payment.

Making a bigger down payment typically means enjoying lower monthly mortgage payments.
If you want the lowest possible monthly payment, consider a fixed 30-year mortgage. Can you afford to pay more monthly? Consider 15- or 20-year fixed mortgage loan services—they will give you lower interest rates.

Saving up for a down payment

If you are planning to buy a home in the next few years, start saving up for the down payment as early as now. The standard used to be 20 percent, but lenders are now accepting much less especially if you are buying your home for the first time. With first-time homebuyer programs, the down payment could be as low as three percent.

However, take note that putting down anything below 20 percent could result in higher costs and spending for mortgage insurance. Also, a small down payment is not always ‘small.’ For instance, if you are buying a $200,000 home and you are putting five percent down, then you still need to save $10,000.

A loan officer from Queensborough National Bank can discuss this matter with you. You can also find a lot of online tips on how to save for a down payment—including saving all your work bonuses and tax refunds, having an automatic savings plan, and meticulously tracking down your progress.

Finding the best lender

It’s always a good idea to compare lenders offering mortgage loan services in your area. Find at least three to four different lenders or banks, including Queensborough National Bank, and consult with their loan officers for advice.

Loan officers understand the challenges of buying a home, and they can help you pre-qualify and minimize the guesswork involved in finding the best mortgage. Don’t hesitate to visit Queensborough National Bank to talk to someone.

Getting pre-qualified

This is a great way to determine how much house you can afford. Getting pre-approval will also show sellers that you are a serious home buyer.