Tips for First Mortgages

Planning for a first mortgage can be a heady, exhilarating, and sometimes downright confusing process. Keeping track of housing terminology, costs, and budgets requires diligence and study. If you are not an accounting wiz, you may want to get a financial planner or lawyer onboard to help you piece together a sound plan.

First time homebuyers are often eager to get to the closing stage, but they may not be aware of the paperwork and loan intricacies necessary to make the deal go through. Don't get railroaded into signing up with a lender until you've really explored your options. You can use Internet sites and other resources to shop around to find great rates. You can also take referrals and study up on your target home buying area, so that you can get a general sense of the figures involved before speaking to a single lender, seller or broker.

First time homebuyers often make the mistake of letting commissioned help guide the process entirely. Sure, your mortgage broker and financial planner can walk you through some of your options. However, your life financial plan is yours alone -- don't let disinterested or even semi-interested parties decide it for you.

Your home is likely to be your largest purchase to date. As such, it's an integral component of your lifetime financial program. However, it's only one component. You also must factor in your other debts and liabilities as well as your assets and investments and figure out how much you can pay per month.

With really diligent research and a good team of investment advisors on your side, you can close on a deal that works for your budget -- even if your credit score is low, you don't have lots in the bank for down payment, and you don't have a bead on your long-term earning potential.

You can also check out Federal help with your loan financing. The Federal Housing Administration and Fannie Mae can equip you with reduced interest rate loans, and you may be able to qualify for numerous tax breaks and deductions, provided that you arrange your home financing properly.

Before shopping for a home, reduce your debt load as much as possible and check your credit score with the three major private bureaus. If your score is unusually low, do what you can to bring it back up -- allow yourself at least three to six months to even out your credit before you start shopping in earnest.