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First Time Home Buyers- The More You Know.

Welcome to part two of Titan Lending's First Time Home Buyers series! We believe educating our clients is vital so they are able to make the most informed choices they can! Let's break down some more material!

What happens at a real estate closing?

At closing, a buyer will sign all the documents from the lender and the title company. After all, documents are signed, they are sent to the county to be filed. Your loan will be funded at the end of the closing.

Fixed-rate mortgage vs Bi-weekly mortgage:

While both effectively pay off your mortgage, one may better cater to your needs. With a fixed-rate mortgage, you will pay the same principal and interest amount for the term of the loan. The most common fixed-rate mortgage terms are 30-year, 15-year, 10-year, and 5-year terms.

A Bi-weekly mortgage isn’t necessarily a technical term; however, it can still be done. Titan Lending recommends that people take their exact payment and split it into two payments, one on the 1st of the month and one on the 15th. This saves three years off a 30-year loan! You are paying the interest off the principal loan amount, saving interest, and paying the principal down faster with compound interest.

What should I Budget for when preparing to buy my First Home?

Buyers need to budget for more than just the initial down payment. You need to have money for closing costs, which are a combination of lender's fees, title fees, and escrow fees (taxes, insurance, mortgage insurance). These costs are all shown on the loan estimate and closing disclosure. Other costs to budget for are utility start-up fees and possible HOA fees or updates/ changes you plan on making to the property.

Inspection vs appraisal:

An appraisal is the value of your house compared to other houses in the surrounding area. Once you have a contract on a home, Titan Lending will order the appraisal for you.

An inspection is where an inspector checks to ensure all the appliances, water, electricity, A/C and heating, etc., are all in working order. It’s always a good idea to make sure things are in working order before going through with the purchase. Your inspection is also out, and if there are many things wrong, you and the seller cannot agree on, the contract can be terminated.

What if I don’t have enough money for a down payment?

Buyers can ask for concessions, which means that the seller has agreed to give money toward closing costs, down payment, or to use at their discretion. Another option is to take out a second mortgage to pay the down payment.

What happens If I don’t make my mortgage payment?

Any late payment after 30 days will negatively affect your credit, which can then affect your ability to qualify for future homes. Worst case scenario, the house will be foreclosed upon if you continue to miss your mortgage payments.

If my Co-buyer isn’t a first-time home buyer, do I still qualify for programs?

As long as the primary buyer is a first-time home buyer, you still qualify for first-time home buyers programs.


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