The Best Answers to Mortgage Questions for New Home Buyers

It would be very difficult to travel for a whole week. You won't hear more horror stories about the housing industry, mortgage rate trends and foreclosures, or tight lending practices by mortgage brokers and banks. 

Although it is enough to scare off first-time buyers, it doesn't stop them from pursuing their dream of owning a home. It can be confusing and difficult for first-time buyers. You need to find the best mortgage for first time home buyer. The following list answers some of the most common questions first-time buyers have about mortgages.

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1. Can I get a mortgage if I don't have great credit?

The short answer to this question is no. Lenders are still more concerned about your future earning potential and ability to pay the bills in the future than your credit history.

2. What is the difference between an adjustable and fixed (ARM) mortgage?

Fixed mortgages are exactly that. Fixed mortgages are fixed interest loans that pay a fixed interest for a set period. Non-mortgage expenses like taxes, insurance, and insurance will all cause an increase in your monthly payments.  

3. What are discount points?

Discount points can be used to lower your total mortgage cost. You pay a portion of the interest upfront. A point is usually 1% of the loan amount. 

4. What documents are needed to apply for a mortgage?

Until the recent crash, lenders simply needed to see that you were breathing. This is all gone now. You should bring one month of pay stubs and the last two tax returns. 

5. What is the minimum down payment for a house?

Many people believe they must have 20% down to buy a home for the first time. You will pay higher closing costs and a higher interest rate. This is the tradeoff.

Remember that knowledge is power. Understanding what you should expect from the mortgage process will make it less stressful and more enjoyable. You can enjoy the entire experience of buying your first home.

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