Finance Issues For Home-Buyers

If you are one of those who are out there looking to buy houses for the first time, then there is a good chance that you will be overwhelmed. There are so many things to consider when you are buying a house and the burden increases if you are doing it for the first time. Your one most important worry will be financial problems. Loans, mortgages, you have to make a few big decisions. It is important that you get a sound knowledge of all the finances that you will be dealing in. You should seek some expert help and get some basic information about the finances at least.

The first thing that you need to take care of is the loan. There are quite a few mortgage loan types that you can consider.

FHA (Federal Housing Administration) Loans:

FHA (Federal Housing Administration) Loans

The Federal Housing Administration is a part of the US Department of Housing and Development. It is much easier to acquire an FHA loan than a conventional loan. Another perk is the much lower down payment requirements. The FHA loan is the best option for all of those who are first-time house-buyers. They have looser credit requirements, lower upfront loan costs and a down payment of as low as three percent.

Conventional Loans:

Conventional loans are in fact the fixed-rate mortgages. They are not guaranteed or insured by the government. These loans are very difficult to obtain and have some strict criteria. They have requirements of credit score, down payment and income.

VA (Veterans Affairs) Loans:

The VA loans are sanctioned by the US Department of Veterans Affairs. They do not make the loans themselves. Rather, it provides guarantees for the mortgages made by qualified lenders. These loans are easier to obtain than conventional loans. It allows the veterans and service men and women to get the home loans on good terms.

All you need is a certificate of eligibility from the VA.

Fixed vs. Floating Rate Mortgages:

Fixed vs. Floating Rate Mortgages

A very important factor to consider is which type of mortgage to get. There is the fixed-rate mortgage and the floating-rate mortgage. In the fixed-rate mortgage, the rate remains the same for the whole term of the loan. Whereas in the floating-rate mortgage, the rates can vary over time. The fixed-rate mortgage allows you the benefit of knowing the fixed amount you have to pay every month. In the floating-rate mortgage, there is uncertainty.


All first time home-buyers face the daunting task of choosing the right mortgage plan. It is quite hard to juggle the finances and understand all the options available to you. It is advisable that you put a substantial amount of time and thinking into researching all the options. You should also seek the maximum assistance from your mortgage broker. Ultimately, it is your own decision. You have to decide what rates you can afford. You understand your finances better than anybody else and you have to make the right call. Do not hurry into getting the mortgage, think it through.


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