Why am I blogging about first time home buyers?
I'm starting a blog about home ownership as it is at this current juncture the major financial goal of my fiancé and I. The blog is intended to focus on the major components involved in selecting and purchasing a home as well as the components of being a successful homeowner in America. We live in lower Fairfield County, Connecticut but would love to see and hear the insight of those anywhere. I am a young professional looking to buy a home in the near future doing research to figure out the smartest buy for my family and I.
Ive always found that the lack of complete and reliable information has stood to make the home buying process complicated and difficult for the average buyer.
What I think consumers want and are not getting is complete and accurate information on what they are being sold and what it actually costs. As a no nonsense type of consumer I like to be able to compare what I'm buying to competing products quickly and easily. That needs to be true for people's largest investment, their home. Let's make it happen right here!
Please send me your thoughts on any topics I post about.! Please feel free to tell me if any of my information is wrong!!! Please email me at firsttimehomeblogger@gmail.com
FHA- One thing I learned from a pal of mime who manages a branch of a local, community bank in my home state of Connecticut is that the government sponsors a bunch of programs that provide services to homeowners, many of which are for first time buyers or low income buyers. Advantages of FHA insured loans are:
Upon further investigation I was able to find in my own state a government organization called the Connecticut Housing Finance Authority (CHFA). This group offers reduced interest rate 30 year fixed rate loans at well below market rates ( rate was around 3.8% as of the end of June 2011.
The potential issue with FHA loans is the mortgage insurance the buyer must pay when borrowing more than 80%. This insurance looks to be significantly more expensive at 1-1.15% of the purchase price as opposed to mortgage insurance that is purchased privately, which I was able to price out at .62% a year or about $2000-2500 more for a person buying a $450,000 home.
Thoughts?
Real estate agents
Credit Ratings- One thing I hear about constantly is credit scores. Freecreditreport.com gave me my credit report for free but made me pay like $9.99 for the thing I really wanted, my score a from the major credit bureaus.
Credit scores matter in terms of what kind of interest rates we pay, corresponding to how risky the lender believes we are to lend to. So all we probably care about is how to raise our credit score to lower our overall housing cost when we get a loan.
What are the tricks to raising your credit score that can help us get lower mortgage payments?
Types of mortgages- What is the best mortgage to take out right now? This certainly will differ depending upon how long you think you will live in the home you buy. The average American lives in a home for 7 years. In the case of that buyer an adjustable rate mortgage (ARM) is in theory a much cheaper option. The mortgage broker I've spoken to and met with made the point that with a 7/1 ARM I would stand to save something like $17,000 during the first seven years.
On the flip side, ARM mortgages can in the long run make your home more expensive if you stay there a long time and interest rates get higher after the initial period ends.
One thing we saw in the news during the times of financial crisis was the issue of adjustable rate mortgage resets. For example if you take out a 5/1 ARM at 3% your interest rate will be 3% for 5 years, and will change after that based upon a formula tied to a benchmark interest rate such as the rate on a one year treasury note plus a premium that is agreed upon at the time you take out your mortgage. Many buyers suffered when their rates reset (increased) but a lot of what we hear about in the news about this refers to subprime buyers, who agreed to mortgages with asinine terms.
Which mortgage you choose depends upon which mortgage the lender will allow you to qualify for as well as your view on how long you will live in your home and where you figure interest rates will be at the end of the fixed rate period.
Thoughts and experiences with good and bad mortgages?
Shortl Sales: For those of us who are confused by this process here is a good explanation- http://en.wikipedia.org/wiki/Short_sale_(real_estate)
I'm starting a blog about home ownership as it is at this current juncture the major financial goal of my fiancé and I. The blog is intended to focus on the major components involved in selecting and purchasing a home as well as the components of being a successful homeowner in America. We live in lower Fairfield County, Connecticut but would love to see and hear the insight of those anywhere. I am a young professional looking to buy a home in the near future doing research to figure out the smartest buy for my family and I.
Ive always found that the lack of complete and reliable information has stood to make the home buying process complicated and difficult for the average buyer.
What I think consumers want and are not getting is complete and accurate information on what they are being sold and what it actually costs. As a no nonsense type of consumer I like to be able to compare what I'm buying to competing products quickly and easily. That needs to be true for people's largest investment, their home. Let's make it happen right here!
Please send me your thoughts on any topics I post about.! Please feel free to tell me if any of my information is wrong!!! Please email me at firsttimehomeblogger@gmail.com
FHA- One thing I learned from a pal of mime who manages a branch of a local, community bank in my home state of Connecticut is that the government sponsors a bunch of programs that provide services to homeowners, many of which are for first time buyers or low income buyers. Advantages of FHA insured loans are:
- Down payment as low as 3.5%
- Approval for those with less than perfect credit
- Second mortgage programs in conjunction with FHA home loans
- Potential lower interest rates.
Upon further investigation I was able to find in my own state a government organization called the Connecticut Housing Finance Authority (CHFA). This group offers reduced interest rate 30 year fixed rate loans at well below market rates ( rate was around 3.8% as of the end of June 2011.
The potential issue with FHA loans is the mortgage insurance the buyer must pay when borrowing more than 80%. This insurance looks to be significantly more expensive at 1-1.15% of the purchase price as opposed to mortgage insurance that is purchased privately, which I was able to price out at .62% a year or about $2000-2500 more for a person buying a $450,000 home.
Thoughts?
Real estate agents
- What are some of the attributes you look for in finding a good real estate agent?
- What are some online resources that might help us find a trustworthy and qualified agent?
Credit Ratings- One thing I hear about constantly is credit scores. Freecreditreport.com gave me my credit report for free but made me pay like $9.99 for the thing I really wanted, my score a from the major credit bureaus.
Credit scores matter in terms of what kind of interest rates we pay, corresponding to how risky the lender believes we are to lend to. So all we probably care about is how to raise our credit score to lower our overall housing cost when we get a loan.
What are the tricks to raising your credit score that can help us get lower mortgage payments?
Types of mortgages- What is the best mortgage to take out right now? This certainly will differ depending upon how long you think you will live in the home you buy. The average American lives in a home for 7 years. In the case of that buyer an adjustable rate mortgage (ARM) is in theory a much cheaper option. The mortgage broker I've spoken to and met with made the point that with a 7/1 ARM I would stand to save something like $17,000 during the first seven years.
On the flip side, ARM mortgages can in the long run make your home more expensive if you stay there a long time and interest rates get higher after the initial period ends.
One thing we saw in the news during the times of financial crisis was the issue of adjustable rate mortgage resets. For example if you take out a 5/1 ARM at 3% your interest rate will be 3% for 5 years, and will change after that based upon a formula tied to a benchmark interest rate such as the rate on a one year treasury note plus a premium that is agreed upon at the time you take out your mortgage. Many buyers suffered when their rates reset (increased) but a lot of what we hear about in the news about this refers to subprime buyers, who agreed to mortgages with asinine terms.
Which mortgage you choose depends upon which mortgage the lender will allow you to qualify for as well as your view on how long you will live in your home and where you figure interest rates will be at the end of the fixed rate period.
Thoughts and experiences with good and bad mortgages?
Shortl Sales: For those of us who are confused by this process here is a good explanation- http://en.wikipedia.org/wiki/Short_sale_(real_estate)
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