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The “American Dream” is to make a lot of money and buy your own home! Despite the COVID-19 situation in the world, the real estate niche in the United States, in certain regions, is gaining momentum. Buying a home in the U.S. does not give you automatic rights to residency, but you can invest in any home you like. You can do it from anywhere in the world or while you’re here in the U.S. Either way, the purchase begins with your trusted mortgage broker, without whom the transaction is impossible.
Every state and city has its own nuances, so a reliable broker will help you figure out all the details of the deal in order.
When buying a home, no one will expect you to have expert knowledge in this area, especially if you’re buying a home for the first time. Still, we want to bring you up to speed, which will give you a huge advantage.
Before you start the transaction, before you meet with a broker, the first thing you need to do is determine your financial ability.
And also determine your true credit rating for a mortgage loan.
When meeting with a broker, remember:
You may get many different offers during the home buying process. First of all, you need to talk to at least, three mortgage brokers to get the lowest interest rate. Many first-time homebuyers make the mistake of contracting with the first lender they go to, missing out on tens of thousands of dollars in savings.
Don’t let a mortgage broker check your credit rating unless you are 100% sure you will work with that person. You risk lowering your credit rating, which in turn will lead to a higher interest rate on your mortgage.
Please refrain from making any large deposits into your bank account unless you can prove where they came from.
Also, refrain from financing (leasing) any large purchases such as cars, boats, or furniture before and during the mortgage approval process.
What is a mortgage?
According to the National Association of Realtors, only 10 percent of homebuyers overall are without a mortgage. Others get a mortgage for a certain amount, usually for 30 years.
So what is the difference between a mortgage and other types of credit?
Low interest rates – about 3-4% per annum as of this writing.
Extended repayment terms – most people pay off their mortgage within 30 years.
Rates and payments are usually fixed – Most people “lock in” the interest rate on their mortgage, so their monthly payment stays the same throughout the loan period. However, adjustable-rate loans are also available.
A “secured” loan – The mortgage is secured by the mortgaged property; if you can’t make the payment, the mortgage company can take your home (or foreclose on it) to make up its losses.
In rare cases, you can use your mortgage to pay the full cost of the house, but most people put some of their money into the purchase.
The amount the buyer contributes is known as the “down payment.” The mortgage covers what’s left over.
For example, if you put $35,000 of your own money into the purchase of a $350,000 home, you make a 10 percent down payment. The remaining $315,000 is covered by the mortgage.
First Home Buyer Loan Programs
Today’s homebuyers can choose a loan from many options.
More than 90 percent of buyers, including first-time homebuyers, end up using one of four popular loan programs:
Conventional Home Loan.
Federal Housing Administration (FHA) home loan.
The Department of Veterans Affairs (VA) home loan.
The U.S. Department of Agriculture (USDA) home loan.
These programs are popular because of their affordability, low cost, and friendliness.
Each has unique benefits and your choice will depend on exactly what you’re looking for when buying a home for the first time – (lower down payment, lower loan percentage, lower income options, etc.)
Your loan officer will help you choose the right type of mortgage based on your needs. But you’ll need to know about each of these programs beforehand, to make sure you’re asking the right questions. We’ve prepared a brief overview of each of them for you.
