FirstTimeHomeFinancing.com is a service assisting consumers who are searching for information about home loans and first time home buying resources. With our fresh articles from mortgage and real estate experts, people are able to gain everyday knowledge and strategies to better equip them for their home finance journey. FirstTimeHomeFinancing.com provides an inclusive source for Americans in pursuit of cost-effective housing because we supply them with a simple path for financing and homeownership. If you are looking for help in making the transition from renting to home ownership, this is a great website to start at.
Our comprehensive network of local mortgage brokers, lenders and other financial professionals in all 50 states means you can find someone who is close, convenient and competitive providing the best mortgage rates and terms available. We do not offer mortgage products ourselves, but provide a direct channel between consumers and lenders and serve as an independent source of information.
Our top goal is to offer consumers with hands-on and wide-ranging product information about interest rates, qualified mortgage options, and lending opportunities for first time home buyers:
The dream of homeownership is almost as American as baseball or apple pie, but that doesn't mean you should throw caution to the wind. Take advantage of Federal, State and local resources for first time home buyer prospects in all 50 states.
Buying a home of your own is a dream for millions of people, and making that dream into a reality begins by finding the loan that works best for you as a first time home buyer. But what kind of loan can you really afford? It's something that many borrowers don't fully understand when starting the process, but something that absolutely needs to be given some consideration.
To determine how much you can afford, you can use formulas that are very similar to those a lender would use as well. Primarily, lenders look at a few basic things including your current income, the amount of debt you already have, and the cost of a loan.
For example, your debt to income ratio is determined by dividing your total amount of debt by your total monthly income. Let's say that you have $2,000 in monthly bills, and earn about $6,000 each month in income. Dividing the $2,000 by $6,000 gives you a 33% debt to income ratio. This is just as important a number as your credit score to lenders, and it can also help you see what kind of loan you can really afford.
Another thing to utilize is the mortgage calculator. This will help you understand just what to expect in overall monthly costs from your loan by determining monthly payment amounts. There are three factors that come into play here:
Combining these three pieces of information is all it takes to determine how much your mortgage will cost you on a monthly basis as well as over the course of its lifecycle.
For example, let's say that you are borrowing $200,000 with an interest rate of 4%, over a term of 30 years. Punching those numbers into a basic mortgage calculator gives you a monthly payment amount of $955, for a total loan cost of $343,739. Obviously, different fees could be added to your loan depending upon the lender and the type of loan, but this basic calculation can help you determine just what kind of loan you can really afford.
Once you have the mortgage amount and monthly payment figured out with your calculator, you can compare it to your current monthly debt and to your debt to income ratio. This helps you plan out a budget and see whether or not your current loan is one that you will be able to handle throughout the years. It's also the basic method used by lenders to ensure that you will be able to repay the loan without defaulting.
Mortgage calculators and debt to income ratio calculators can be found easily online and are one of the first tools that any 1st time home buyer needs to consider using. They can deliver a very specific and detailed estimate of overall costs, which you can then use to determine what you can afford. Take some time to do research into your loan and your current financial situation. This ensures that you make the right decision regarding your loan and your home purchase.
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