First Time Buyers Mortgage & First Time Buyer Mistakes

Now is a lovely time to become a homeowner. With mortgage rates at near historic lows, mortgage payments can often be lower than rent on a home or town home. First time buyers can qualify for a mortgage at great low rates, but it is best to work with somebody who has experience. Great mortgage rates are important, but you also need to take other factors in to consideration. Variable vs. fixed rate mortgage, terms, amortization periods, penalties, fees and flexibility are all important parts on finding the right mortgage.

Avoid these common first time buyer mistakes:

• Not getting pre-qualified for a mortgage
if this is your first home purchase, you need to know how much you can afford before you look at houses. A qualified mortgage broker can help you look at your income, debt ratios, and other factors to help you select an amount you can afford. Six times you know your cost range, you can narrow your search and avoid taking a look at (or worse- making an offer on) homes you cannot afford. Sellers also prefer offers to buy that do not have conditions of financial approval. In a hot actual estate market, being able to quickly put in a solid offer can give you the edge over competing bids.

• Only going to their bank for a mortgage. Loan officers work for the banks and only offer the products that the bank carries. A mortgage broker works for you - they shop your loan over plenty of lenders, including banks, finance companies, trust companies and private lenders. Even if the bank turns you down, an experienced mortgage broker can often discover a lender willing to finance your mortgage. You only must fill out one application and have one credit document pulled, and your mortgage agent can shop it over plenty of lenders - having them compete for your business. You pay no fee for this service - the mortgage broker is paid by the lender you pick. Shopping your home loan over plenty of lenders can save you thousands of dollars over the period of your mortgage.

• Use a professional actual estate agent. In case you currently own a home, you will be better off selling your home before looking to buy a new one. You will know how much you have left after you sell your home to put towards the new one, and won't get stuck carrying both homes if your home does not sell before your new home closes.

• Have your home inspected by a professional inspection company. The cost of having a home inspector is a necessary expense since the cost of major defects, latent or otherwise, can be disastrous. Have the home inspected for structural defects, insects, radon, and other issues. If defects are identified by the inspection, you may be able to receive a lower purchase cost to cover the cost of repairs, or need the seller to make the repairs to the satisfaction of you/the inspector.

• Have a lawyer handle the legalities and arrange for homeowners insurance before you move in. Since owning a home is probably the largest investment you will ever make, it pays to protect your investment.

In case you are looking for a first time buyer's mortgage in Ontario, Canada or need to get preapproved before you shop for your first home, learn more with First Class Mortgages.

By: Rashid