The Finance Blogger

First Time buyers of homes need to have their act together or they will end up spending more money than they should. Our most recent reader left us a message about first time buyer mortgages. They are getting a mortgage for the first time. Since they plan to move from an apartment they currently rent into a home they plan to purchase. They appear to really have their act together in terms of credit rating. Also income, financial management skills and home inspection. They also are planning for long term expenses such as furnace and roof replacement.

This couple makes sufficient money to carry the mortgage they are applying for including taxes and utilities. Many couples get themselves into financial difficulty for many reasons, however one is that they forget about having to pay the taxes and the utilities in their planning and end up running short at the end of the month. No one wants to be stuck in their home because their expenses are so high that they cannot afford to go out once and a while. Make sure that you have accounted for taxes when you are budgeting for that new home you are buying.

Home Maintenance Issues for First Time Mortgage Buyers

Another area that many couples fail to consider is home maintenance. They have lived in an apartment for several years and have only had to pay for their rent, the cable TV and the telephone. Heat , electricity, and water are extras, but what happens when the furnace quits and they must cough up $4000 to replace the furnace or replace the roof that is suddenly leaking. These can be major issues for many couples who are living on the edge in terms of monthly payments on their mortgage and have not planned for maintenance. This couple has a home inspection that suggest that these items should not present a problem in the near future.

They asked for advice, and this is one area to consider setting up a maintenance fund that they can draw on for major house repairs as needed.

Create Competition for your Business, Compare Various offers from Several Banks

They will qualify for some of the best rates in terms of mortgage interest rates since they have good stable incomes and they have an excellent credit rating. This is so important for many reasons. Having an excellent credit rating means you qualify for some of the best rates and saves you money over the life of your mortgage. Even a quarter percent advantage can save you thousands over a 30 year mortgage. For example a quarter percent savings on the interest rate will mean a $4000 savings over the life of a 30 year mortgage, which is a substantial savings. Many banks will offer even more savings to their best costumers, so it pays to keep your credit rating high.

This reader should check with several banks and let them know that they are shopping for a mortgage. Creating a little competition, sometimes generates additional savings specially when you have a great credit rating.

Maximize your Down Payment On your First Time Mortgage

Our couple did not mention how much they were planning to put down as a down payment, however the more you can place on the home and make your mortgage smaller helps in several ways. First the payments are less each month as a result, the interest you pay also decreases and the more equity you have in your home makes you more attractive as a customer to the lenders. Our couple should try to maximize the amount they put forward as a down payment on their mortgage.

If you have questions about debt, mortgages, loans , refinancing and more, why not leave us a comment and we will try to answer your questions in a following post. For more help about obtaining a new mortgage, click here.

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