First Time Home Buyer Loans - How To Apply For A Mortgage Loan
For a first time home buyer, applying online for a mortgage loan
makes the experience easy. You have plenty of time to compare
rates and terms to find the best financing for your situation.
With just a few steps, you can secure financing for your home
with the lowest possible rates.
1. Select Your Terms
Mortgage terms affect both your interest rate and payment. With
a large amount of flexibility, lenders allow you to tailor your
loan to fit your budget needs. So if your goal is to purchase
the most with your income, look into an adjustable rate mortgage
with initially low payments.
For security, fixed rates can also have reasonable rates. For
even lower rates, you can purchase reductions by paying points
at closing. One point equals one percent of the principle.
Paying points is affective if you keep your mortgage for at
least seven years in order to recoup the cost of buying the rate
reduction.
The length of the loan will also affect your rates and payments.
15 year mortgage provides you with a cheaper loan, but payments
are about a third higher than a 30 year mortgage.
2. Research Your Lender
Even a difference of an eighth of a point in rates can save you
thousands of dollars. The easiest way to save money on your
home's purchase is by finding the lowest costing loan.
With online mortgage companies, in just a few minutes you can
request loan quotes without hurting your credit report. Every
time a potential creditor accesses your report, it temporarily
hurts your score.
Rates are one way to evaluate loans. But closing costs can also
add up to thousands. That's why the APR number is important. It
gives you the total cost of the loan. But if you plan to move or
refinance, focus on low closing costs rather than low rates.
3. Apply Online
When you have found the right lender, you can start your home
loan application online. Even if you haven't found the right
house, you can still get pre-approved and lock in your rates.
With online financing companies, your paperwork is expressed
mailed to you. You complete the forms with a notary's seal.
Working with your real estate agent, escrow company, and seller,
the date of sale can then be finalized.