first time home buyer in the USA.docx

1. Title: First time homebuyer in the USA Meta Description: Buying a house for the first time? Need a thorough knowledge about Mortgage loans? Well, do not worry as with this article you will get all the information you need. Buying a house for the first time can be overwhelming and exciting. After all, it is your dream house. But what comes in between buying the house and deciding in which room the Barcalounger goes? Those are the details that we’re going to discuss here. Let’s Quickly understand what is Mortgage! A mortgage is itself a type of loan that allows you to buy a home and for the transaction, two parties are involved one is a lender and the second one is the borrower. The lender loans you the amount you need to buy the house based on your credit score, income debt, and on your annual income. The borrower is the one who will be buying the house. The following points are the ones that you should keep in mind before buying a house with a mortgage. - - - - - Choosing the right type of Mortgage Loan and its eligibility factor. Understanding the budget and home buying process. Finance options and your home insurance plan. Pay down your debt before buying. Do your paperwork thoroughly. Now we can move forward to the actual process where we will discuss the budget factor and the home buying process. What House Could I Afford to buy? Buying a house in the USA for the first time with the help of a Mortgage is a very important decision you take. Mortgage lenders in Michigan, USA are one of the expertise in the mortgage field who might guide you in buying that perfect house for you. Understanding the whole process detailly and choosing the right (appropriate) type of mortgage is crucial as you don’t want it to be too expensive. When it is your first time buying the house, you calculate and determine the budget thoroughly like how much you can spend and how much you need to spend to buy the house. The location from where you’re buying the house, how the mortgage market works around there, Knowing that is a smart move to learn the whole budget cycle.

2. Keeping all the factors in mind like your credit score, your down payment, and your home insurance with your annual income. Key Points: - ? Choosing the right type of mortgage helps you to buy the house by spending less money. ? Calculate your budget process thoroughly to understand how much you should spend. ? Get knowledge of the mortgage market of your area. Now if we take an example to understand it in an easy way then, Suppose I’m buying a house with the help of a mortgage and my budget or you can say annual income is 80,000$ then house price will be in between 200,00 to 210,00$ then accordingly to my budget I can go for a Mortgage loan of 200,00$ with the interest rate of 4.5% concluding with a monthly payment of 1,867$ for a period of 15 years. Now for which Loan you should apply to; we’ll discuss it further. While buying the house you go through all the possible ways that are included in the mortgage where for what kind of loans you can apply to. As there are two types of loans where you can do your home buying process under the mortgage. ● Conventional Loan Conventional loans bring more risks as it needs a higher credit score, lower debt payment and most importantly it is not backed by the US government. ● FHA Loan FHA loan is an easier one to apply in compared to conventional one as it doesn’t produce any risk and also the US department of housing and urban development supports it but in FHA, you will need to buy the premium insurance so the lender can be assured. Now when you will be applying to any of those above-mentioned loans, some specifications make you eligible to get a loan for a mortgage. ? A reliable and stable income. ? A good credit score, for a Conventional loan, should be 620 and for FHA it should be 580. ? A debt-to-income ratio should be up to 50% or less than that. Now when you’re making a big purchase with such a high loan amount or it can be a lower one according to your mortgage then you should figure out your finances before applying to any loan you’re going to.

3. As two types of finances come under every type of loan, you must know which one will be helpful to you. ? Fixed-Rate Mortgage In Fix Rate Mortgage, the interest rate of your loan amount will stay the same as long as the time period you’ve chosen to pay off your loan. But as the interest rate stays the same you might be paying an extra amount to your lender for years. ? Adjustable-Rate Mortgage In ARM your interest rate will depend on the market. The rates might vary as the market rates change. As it varies, you might pay the lower amount or the higher amount for your interest rate which can be beneficial in one way. Either way, whatever your interest rate might be, the most helpful way for you will be to lock your Interest rate. As you do, you will get a specific time period to make your interest rate stay the same. ? The rate lock might stay for 30-60 days. ? The lock protects the borrower from the rising market/interest rates. Apart from all these, there are also two types of insurances that you can apply for. 1. Homeowners Insurance In homeowners insurance, if your property gets damaged then it protects you from that. 2. Mortgage Insurance In Mortgage insurance, your lender will be protected in case you don't meet up the obligations of a Mortgage loan or don't pay off the loan. Final Words

4. As we discussed, a Mortgage needs thoroughly well-made paperwork and accurate planning. With your annual income, the loan amount you will be applying to, and how the interest varies accordingly to your mortgage loan type and your financial plan. It all decides a perfect mortgage plan for you to buy the house you’re looking for. Among all the mortgage refinance companies in Michigan, We assure you that our company will guide you in a systematic manner. As being the home mortgage lenders in Michigan, we at DHM exactly know how the market works. And especially if you’re buying the house for the first time and do not know how the mortgage factor works, then this article will help you with every doubt you will have. References: - 1. https://www.rocketmortgage.com/learn/what-is-a-mortgage 2. https://www.investopedia.com/articles/mortgages-real-estate/08/homebuyer-fin ancing-option.asp 3. https://www.thebalance.com/what-house-can-i-afford-2385733 4. https://loans.usnews.com/articles/a-checklist-for-first-time-homebuyers 5. https://www.nerdwallet.com/article/mortgages/tips-for-first-time-home-buyers