Mortgages for First Time Homebuyers

Deciding to become a homeowner for the first time is an incredibly exciting prospect. However, because you’ve never bought a home before, there are a lot of things to consider. Just knowing exactly how to budget for a new home is something that trips a lot of first time home buyers up.

Many don’t realize that there are a lot more costs involved with home ownership than they may have thought, from property insurance to HOA fees to increased utility costs. One thing’s for sure though, odds are that you are going to need to apply for a mortgage. Very few home buyers can pay for a new home out of pocket – they need the help of a home loan.

Basic Mortgage Information

The following are some of the basic things that you should know about mortgages for first time home buyers:

  • The lower your down payment is, the higher your monthly mortgage costs will be. If you can put down a 20 percent down payment, then not only will your monthly costs be lower, you’ll pay less in interest over the course of your loan and you won’t be required to purchase mortgage insurance.
  • Although you will be paying more every month during a 15-year loan than you will during a 30-year loan, you’ll end up saving a substantial amount of money over the long term due to the amount of interest that you would end up paying over a 30-year loan. You need to weight the pros and cons based on what you can afford.
  • Get pre-approved for your mortgage. Don’t wait until you found a house you want to apply. Your mortgage application may be rejected, or you may not qualify for as much as you had hoped.

Maryland Mortgage Program

The Maryland Mortgage Program was designed to help first time home buyers to find safe and secure home loans from Maryland’s Housing Finance Agency. The following are a few things that you should know about the Maryland Mortgage Program:

  • Only first time home buyers are eligible for the program.
  • There are numerous factors that are taken into account in order to be approved for a loan. These include household income, age, current debt, credit history, employment status, social security and location of the home. These factors are largely determined by your lender.
  • You may qualify for a DPA (Down Payment Assistance) loan up to $5,000. This loan can be increased with the help of Partner Match Programs, which are partner organizations and local government programs.
  • You can use a preferred lender, but the lender must be part of the Maryland Mortgage Program in order to receive a Maryland HomeCredit.
  • Maryland HomeCredit is good for as long as your principal loan amount lasts and you can use it every year while the principal loan is active – however, you can’t transfer the credit to another property.

For more information concerning Maryland-area mortgages for first time home buyers, be sure to contact Alex Echeandia at Eagle Creek Mortgage today.