7 Tips on how first time buyers can get mortgage

First time buyers often find it hard to get a mortgage. It is of course a scary thing to do, not to mention expensive. The good news is that there we have tips for you to get a mortgage easily and to get the best deals out there in the market.

Tips on how to get a mortgage for first time buyers

Check your credit report Having a good rating is highly needed if you really want to get a mortgage. Bear in mind that a mortgage is just another type of loan that of course, will require you to have a clean credit history and a high credit score. The better your records are the better interest rates you’ll be able to get.
You should also know how much you’ll need. It is ideal to have a deposit of at least 20% of the value of the house that you want to buy. If for example the house you want to buy is worth $ 200,000, you are going to need at least $ 40,000 for the deposit. The numbers may seem intimidating but we all must agree that 20% is just a realistic and reasonable amount. Giving them a 20% worth of deposit will also up your chances of getting the best and affordable mortgages there is.
If you don’t have that much money to give for the deposit, you may have two options to work decide on. First is to lower your expectations. We all know how easy it is to get carried away when we’re looking out for a new property to buy. Open yourself to cheaper properties around the area. There are still cheaper properties out there that may not be that expensive but are still in good shape.
Second is to take your time in choosing what to buy. A lot of people think that buying a property is a race and that they have to buy the first that is offered to them. Due to the economy’s unstable disposition, prices are continuously dropping and it is expected to drop again next year. If you have enough time to wait, earn or save more money, do so. Take your time in looking for the right place with the right price and terms.
Next, you have to consider what type of mortgage you should have. Are you looking forward to just paying the interest and nothing else every month? If yes, then an interest-only-mortgage will be the right one for you. This is probably a lot cheaper than paying on a monthly basis.
What kind of interest rate will you pay? You can pay for a fixed rate for the first few years or get a variable rate where the interest can go up and down and lastly, you can get a capped rate which goes down but won’t go up on a certain level. This option is best for first time buyers because it will keep the costs down and it will be easier for you to budget your money for other extra costs that would go along with your house.
Talk with your advisor and ask them for advice. They will be able to give you clearer idea of the best possible options for the situation that you are in as of the moment.

Though the economy is not yet in good shape compared to before, there is still a chance for first time buyers to get a good mortgage. It is important that you know about the process of getting a mortgage and how you can raise your chances of getting it. Following these tips will not only get you a great mortgage but it will also help you save a lot of money in the long run.

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