First Time Buyer Mortgage Reports

Here's how to work out how much of a first time buyer mortgage you can afford:

1. Draw up a complete budget - everything you spend and everything you earn
2. Add up all your income
3. Add up all your outgoings (less rent if you're paying rent at the moment)
4. Take your total outgoings (3) away from your total income (2)
5. Add up all your savings separately.

The figure you get at step 4 above = the maximum amount of money you have to spend in mortgage payments.

The figure you get at step 5 above = your down payment plus costs.

Armed with these two figures, plus all your freshly gathered and organized paperwork (see below), you are ready to go see what type of first time buyer mortgage you want.

Here are a few things to think about when putting your budget together:

• The whole process becomes a whole lot easier and more straightforward if you have all the information you need to hand before you start. You'll want: your recent (last three months) bank and credit card statements, grocery receipts for the last three months, payslips and any other records of income or expenses.


• When looking at spending that varies, such as groceries or clothing, you can add up all you've spent in the last three months and divide by three to get your average monthly spend.


• Infrequent expenses must be included. For example Christmas, Thanksgiving, summer vacation, winter vacation, home maintenance. Leaving these out is an easy but disastrous mistake to make.
  
  You can add all these items up for the year then divide by 12 to give you a monthly spend.


• Whenever you have to estimate a figure, always overestimate rather than underestimate. This way you won't come up short.


• Thoroughly check everything - all the figures you've put down, all the adding, subtracting, dividing, multiplying. Check that you haven't missed anything.


• Be brutally honest with yourself. If you don't like the way your finances are shaping up, it's better you know now rather than further along the line when there's more at stake.

So you have your figure. You know what you can spend. Time to look at what's out there.

But first... what is it about a first time buyer mortgage that you need to take note of? And how can you use this information to ensure you get the best mortgage deal?

1) The Mortgage Term.
You want to know how long it will take you to finish paying the loan. Mortgages are usually taken out for terms of 15 - 30 years. You can also get 5, 10, even 40 year mortgages.

So what?
Well, once you've worked out how much you can spend each month on your mortgage, understanding mortgage terms means you can then work out the maximum house price you can afford.

But even better, you can decide the house price you want to afford.

I hope you get that last sentence. And I hope it's gets you excited. Because this gives you a lot of flexibility, because this is very powerful. In lots of ways this understanding will translate into a stronger mortgage application.

Want an example? Please have a quick look here ->

2) The Closing Costs.
These costs come with all mortgages. They include various fees such as appraisal, registry, attorney and notary fees. They are usually to be paid in full right at the start of your mortgage term, as soon as your mortgage has been approved

In total, they usually come to 3-6 percent of the mortgage. You'll want to have this at the back of your mind at all times.

3) The Interest Rate.
Interest is a fee. It's what you pay your mortgage lender for being able to borrow money from them. This fee is expressed as a percentage (a fraction) of the amount you have borrowed.

It's usually quoted annually, but not always, so do double check.

But wait ...
Not everyone gets offered the same interest rate.

To find out what the interest rate you get offered will depend on, and how to get the lowest possible interest rate for your circumstances, Please have a look here -> First Time Home Mortgage Notes, Checklists And Tips