First Time Home Buyers Guide

First Time House Buyer Help and Advice

Oct 8, 2009 Asa Ghaffar

About to buy your first house? This first-time home buyers guide provides advice on house deposits, FICO credit scores, mortgage brokers and household budgeting

It can be difficult for a first-time house buyer to know what to do when starting out. This first-time home buyers guide aims to provide general advice for those who are about to purchase a property for the first time. This will ensure that many of the more common pitfalls are avoided.

First Time Home Buyers Guide

It is not only possible to simplify home buying, it is also surprisingly easy to reduce the cost as well. This article covers FICO credit scores, household budgeting, house deposits, finding the best deal and the use of mortgage brokers. Find out why all of these matters are so important.

Household Budgeting and Affordability

It is essential that a first-time home buyer performs a comprehensive assessment of income and expenditure. This is to establish an affordable amount for mortgage payments each month. Ensure that there is a degree of flexibility, especially if the rate of interest isn't fixed.

FICO Credit Scores

A first-time home buyers credit score will determine affordability. The lower the score, the higher the interest rate paid on the loan. Individuals who have a poor credit history (missed and late payments on credit agreements) will have to pay more to borrow money.

Get hold of a free online credit report from the major credit reference agencies, check these for errors and get any inaccurate data corrected. It is important that this is done a minimum of six months prior to any application for credit. It is possible to get help from a licensed attorney.

House Deposits

A discussion of ways to raise money for a house deposit is beyond the scope of this first-time buyers guide. However, it is important to realise that the amount of money put down on a house will have a huge bearing on the rate of interest charged, not to mention the chance of getting a loan approved.

Those who are able to provide a house deposit of 20% or more will have far more loan options. This is because it protects the lenders interests against negative equity and eventual default. Liquidity is returning to the mortgage market so there will be offers out there for those who cannot offer a large deposit.

Mortgage Brokers

First-time home buyers can benefit greatly from the knowledge and experience of a mortgage broker. They not only form an invaluable source of guidance, many have useful industry contacts. However, there will normally be a fee equivalent to 1% of the loans value. This can usually be added to the loan.

Its is advisable to use a mortgage comparison service to trawl the market for the best deal. Talk to a mortgage advisor once armed with several quotes to see if these can be beaten. If the savings is greater than the cost, it makes sense to proceed.

This first-time home buyers guide will help to provide a new entrant to the housing market with some very useful pointers. However, it is important to continue to perform further research and use the services of an experienced professional when trying to get on the first rung of the housing ladder.

The copyright of the article First Time Home Buyers Guide in Mortgages/Loans is owned by Asa Ghaffar. Permission to republish First Time Home Buyers Guide in print or online must be granted by the author in writing.