| Buying your first home and with it your first mortgage | | | | lot. |
| can be a daunting process. The entire process can be | | | | Next up we have the 15 year mortgage. This |
| long and confusing. But with a few tips and the right | | | | mortgage is 180 payments spread out over, you |
| information you can make your first mortgage buying | | | | guessed it, 15 years. As the 15 year mortgage is half |
| experience quite a bit easier. | | | | the time frame of the 30 year you can expect the |
| I know this article is named "First Time Mortgage | | | | size of the payments to be about double the size. |
| Buyers" but one of the first things you really need to | | | | Payments are also fixed in this mortgage as in the 30 |
| look at is if you can afford a mortgage to begin with. | | | | year mortgage. |
| Owning a home has its benefits, such as tax | | | | And last, well for this article anyway we have the |
| advantages, the opportunity to build equity with your | | | | "Adjustable Rate Mortgage" or ARM's as they are |
| payments and the possibility of appreciation. How ever | | | | sometimes called. The ARM is a mortgage with it's |
| there can be some large issues with owning a home. | | | | interest rate tied to an economic index. The interest |
| Home values may collapse, and tax rates may climb. | | | | rate and payments are periodically adjusted either up |
| You also have to factor in home repairs, roof starts | | | | or down as the index changes. ARM's can quite often |
| leaking? You cant just call the rental office anymore, | | | | start with a lower monthly payments than the |
| the money to fix any issues is yours alone. | | | | mortgages above but there are a few things to keep |
| The next step is to take a look through the mortgage | | | | in mind with these mortgages. Your payments could |
| offerings in your area. Get a feel for what the | | | | change as the index changes, sometimes quite a bit. |
| average rates and fees are and what the total costs | | | | Your rates may not go down much if at all when the |
| of the mortgage will be above and beyond the amount | | | | index drops. If you want to pay off you ARM early |
| you mortgage. Another good idea is to look through | | | | due to a higher payment change you may have to |
| the classifieds for the areas your interested in to see | | | | pay a penalty fee. And lastly you may end up paying |
| about what the homes around the size you want are | | | | back MORE money than you borrowed due to rate |
| selling for. These things together will give you a good | | | | changes, even if you make each and every payment |
| idea on the total costs of which ever mortgage you | | | | on time. |
| chose in which ever area you chose. | | | | It is not an easy decision in which mortgage to chose. |
| Now we are going to take a look at a few common | | | | A lot also depends on what your down payment is, |
| mortgage types and some benefits and cons they | | | | and what your income per month is. It is recommended |
| may have. First up we have the 30 year mortgage. In | | | | to sit down with a expert before you make any |
| this mortgage the buyers payments are fixed. This | | | | decision. Buying a home and the mortgage that goes |
| means that spread out over the period of 30 years | | | | with it can be one of the best things you ever do as |
| you will be making 360 mortgage payments. This is | | | | long as you do your homework and avoid the pitfalls all |
| one of the more popular mortgage types and is good | | | | too many people fall into. |
| for homeowners who do not plan to move around a | | | | |