Must Have Advice for First Time Home Owner Loans
If you are considering buying your first home in Florida, there are some things you should know about your home loan options. Selecting the right first time home owner loan can seem like a daunting task, but if you keep these few tips in mind, you can have the home of your dreams in no time.
Building Good Credit
Many people think that to qualify for a first time home owner loan in Florida you must have really good credit. This is not the case. There are several alternatives for first time home owners who have had some credit problems in the past, or buyers who have not yet established a strong credit score.
A good way to start is by showing that you are working towards a solution to these problems by keeping up to date on your current financial obligations. It may seem small, but taking responsibility to build a positive credit history will go a long way towards proving to potential lenders that you can handle the commitment of a home loan. Find out more ways to prepare as a Florida first time home buyer by clicking here.
Another thing you can do is look for lenders that specialize in less than perfect credit. You may have to use a sub prime lender to get your first time home owner loan approved, but don’t let that scare you. Many reputable sub prime lenders are out there and are willing to help you out. Just make sure to read all the terms so you don’t get stuck paying enormous closing costs. Also, pay special attention to the prepayment penalties since you will probably want to refinance once your credit score improves.
Getting Pre-Qualified
One of the best things you can do when shopping for a first time home owner loan is to get pre-qualified. This means going to your chosen lender and asking to be approved for the loan in advance. Your lender will go through the loan application and qualifying process with you and tell you the total amount you are able to borrow. They will then provide you with an approval letter stating how much you can spend and when the offer expires.
Getting pre-approved gives you tremendous buying power and an edge over other buyers. Sellers like to see pre-qualified buyers because it makes the closing time go much quicker and they are virtually assured a done deal.
Working With a Mortgage Broker
Another way to help your first time loan process and closing go as smoothly as possible is to work with a mortgage broker. You may not realize how important their role is in helping you as a first time home buyer, so read here about
Picking the Right Loan
Many types of home loans are available, each with different advantages for first time home owner loans. Here is a list of some of the most common home loans and how they may affect your choice for a first time home owner loan.
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Fixed rate loans are great if you have good credit, plan on staying for a while, and if the current rates are low.
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Adjustable rate loans fluctuate with prime and afford you a lower rate in general, but do run the risk of going up.
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Interest only loans keep payments very low which makes them affordable for many, but do not earn any equity.
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Sub prime loans are good for those who have less than perfect credit. (Note: Few if any lenders offer these anymore)
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FHA loans are good for pretty much anyone, but have some strict requirements.
Which one you choose depends upon your financial situation and your long term and short term goals. Make sure you know your rights regarding home loans in Florida, and talk with your home loan specialist about any concerns you may have.
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