Today one of the largest and most costly investments an individual can undertake is the purchase of his primary residential home. Certainly, for those who have purchased homes before and have a decent track record of making payments as well as good credit, mortgage funding does not present a problem. However, first mortgage funding can become a real learning experience for the person who has never before bought a home.
The process of buying a home can be a new and rather stressful process for the first time home buyer. So many different aspects of buying a home present some items the potential home owner should definitely consider. In getting that first mortgage funding, the individual must be aware of his credit rating. Since poor credit or no credit will interfere with receiving any first mortgage funding, he must take action to establish and improve his credit. It is important that he build up his credit standing and maintain a good credit rating, the higher the better. With good credit, the first mortgage funding will not only be possible, but the first mortgage funding loan will also carry a lower interest rate which will save him hundreds of dollars over the years.
Another item the first time home buyer should consider is to save for a substantial down payment. The greater the down payment, the more advantageous the terms of the first mortgage funding loan. Another important thing to consider is just how much of a house the individual can afford. Most buyers are expected to use twenty-five to thirty percent of their pre-tax income on their housing. However, the first time home buyer must also consider his complete budget: living expenses, credit card and other debt, etc. He must consider this realistically; otherwise his judgment may cause him to struggle in making his future house mortgage payments and this can abruptly end his first mortgage funding and ruin his credit for years.
Finally, the first time home buyer should consider a FHA loan or Fannie Mae, which is insured by the Federal Housing Administration. The FHA loan makes buying a home for the first time buyer an easier and less expensive way of obtaining the first mortgage funding. An FHA loan may be advisable for the individual who is financially limited and needs to finance the majority of his closing costs, who plans to buy a one to four size family home, and can only afford a low down payment or no down payment. Most definitely, the first home buyer should consider that his best option for his first mortgage funding is an FHA loan.