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Prepare Yourself Before Buying Your First Home
By Jeffrey R. Lukasavich
Purchasing a home for the first time can be very stressful and time consuming. Most lenders have a variety of first-time homebuyer programs to choose from. Without knowing what each program offers you may end up making a decision that doesn't best fit your needs. To help you with this process we have put together a listing of a few of the loan programs your lender may offer you and the benefits to each program.
Adjustable Rate Mortgages (ARMs)
For buyers looking for a lower initial qualifying rate.
Do you plan to live in your home for a short period of time? Are you looking for a lower initial rate to help you qualify for a mortgage? Then you may want to consider an Adjustable Rate Mortgage (ARM). With an ARM, the initial qualifying rate is usually much lower than that of a fixed rate mortgage. Should rates rise, you'll be protected with a term and a lifetime rate cap. And, the convertible ARM offers the option to convert to a fixed rate at a later time.
Bi-Weekly Mortgage
Saves buyers thousands of dollars in interest over the life of their loan.
Bi-weekly mortgage's makes a lot of sense for smart shoppers. Here's how it works: Simply pay half your monthly payment every 2 weeks and you'll save more than $30,000 in interest on an $80,000 mortgage. And you'll pay it off 7 years sooner. Save even more on a larger loan. That's all there is to it.
Plus, bi-weekly mortgage's have other great features, including:
- Down-payments as low as 5%
- No pre-payment penalty
- Ability to build equity and move up to a bigger home sooner
- Loan amounts up to $1,000,000 with Jumbo Bi-weekly products.
Fixed Rate Mortgages
For buyers looking for the security of a fixed payment.
If you plan to live in your home for a long time, consider the security and stability of a fixed rate mortgage. With a fixed rate for the life of the loan, it's easy to plan your budget, since your monthly principal and interest payments will always remain the same. With some lenders, down payments on fixed rate mortgages can be as low as 0%.
Opportunity Mortgages
Can make you a homeowner, even if you don't have a lot of cash.
With down payments as low as 0% and an available closing loan, you can finance nearly everything. Or you can take advantage of a below market interest rate and have a low 3% down payment. You can also finance up to 100% of your home's purchase price.
Jumbo Mortgages
For buyers looking for a larger loan to buy a bigger home.
If you're moving up to your dream home, a Jumbo Mortgage may be just what you need. Many lenders offer Jumbo Mortgages starting at greater than $300,700 with competitive rate and term options.
When choosing the loan program that's best for you, make sure to ask your loan originator to go over all the programs they offer and how each program will benefit you. Making the right decision at the time of purchase will save you both time and money for years to come.
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