As the title of this article would suggest, I am going to take you on a journey through the ups and downs on fixed rate mortgages. When buying a house, especially the first one, I think that it is literally the most terrifying experience that I have been through, and I have combat experience as a military veteran. For those of you who find yourselves still anticipating the purchase of your first home, let me give you a brief rundown of what it is and what it isnt. What it isnt will be the easies to tell you about. It isnt like going to the store and buying what you want by swiping your card. It isnt even like buying a new car, although the new car buying experience is a little bit closer. It is like looking at dozens of houses that you hate in order to find one that you like, only to learn that it is 10,000 more than you wanted to spend. So you make an offer and wait to see if the seller takes the offer or sends back a counter-offer. Once the game of offercounter-offer is through you set up a closing date. At the closing you sit down and sign enough papers to make Leo Tolstoy quake in his boots. Once that hour devouring procedure is done, the house is yours and you are in debt for 30 years. Sounds appealing doesnt it? Well, actually, it really is. But, before you get to the point where you can sign all those papers, you have to decide on what kind of loan will be best for you. There are a couple of different options and, in this first installment, I will discuss the fixed rate mortgage.
Overview of a Fixed Rate Mortgage

As the name would suggest, the fixed rate mortgage is a loan that has constant payments. By constant I dont mean that they will be due every month (although they will), rather I refer to the fact that they do not change. If you get a fixed rate mortgage and the payments are 900 per month, they will remain at 900 for the duration of your loan. Nothing changes, it is set in stone, and you can set your clock by it, 900 a month for 30 years.
Benefits of a Fixed Rate Mortgage.

There are a number of benefits to having a fixed rate mortgage. I would like to discuss two of them, the planning power that it gives, and the financial liberty that you can take from it. Lets start with the planning power.

Planning Power
To take on the responsibility of a 150,000, 200,000, or even 1million pound debt is, as a mentioned before, very scary. But, to know that all you will ever be required to pay is 900 a month (or whatever your payments end up being. I dont in any way want to insinuate that all mortgage payments are going to be 900 if you get a fixed rate.) is a very comforting piece of knowledge. You can plan your budget around that amount and make sure that you can always afford it. It really helps things out to have that amount set in stone. The next thing that most people get out of a fixed rate mortgage is financial liberty.

Financial Liberty
What I mean by that would be best communicated in the description of a hypothetical scenario. Picture a young couple, just out of college, just married, and brand new at the jobs in their respective careers. They decide to take out a loan and buy a house. They, because of the salary restrictions that they are working with, can only comfortably afford 500 a month. They know that this wont get them the house that really want so they decide to stretch a lot financially and get a house that will run them 800 a month. After two years they both get promotions and their bills get easier to pay. After another two years they both move into management and get more promotions. Suddenly they find themselves in a position where they can actually comfortable afford to make 900 a month payments, and later on they can make 1000 a month payments, but they dont have to. All they are required to do is 800. Every amount of money that they pay over 800 in a month goes towards paying off the principle and this gets their house paid off much faster. When the house is paid off, there is 800 a month that is no longer being tied up in living expenses. You see, in a fixed rate, 30-year mortgage, it will take 22 years to pay half of the principle because so much of that money is going towards the interest. If you consistently pay more each month than the minimum payment you can pay off a 30-year mortgage in 20 years easily.

Final Synopsis
For the young, first time homebuyer with a solid income, a fixed rate mortgage is a pretty good option. It allows, as was earlier stated, predictability and the possibility for earlier financial liberation. For the older first time homebuyer this is the best option. The ability to pay off a mortgage in less than 30 years is something that becomes very important as retirement approaches. For the buyers that are on a much tighter, less predictable budget, this may not be the best option. In that case there are other mortgages that would be better suited for their needs. But, as with all mortgage and real estate decision, sit down with a professional who can assess your individual needs and come up with a plan that is right for you.

First Time Home Buyer Loans Home Buying Advice For First Timers

Purchasing your first home is an exciting and scary time. For the most part, new homebuyers are unfamiliar with the home buying process. Before accepting a mortgage loan, it is important to educate yourself on various loan programs. Furthermore, first time home buyers should be aware of factors that improve and decrease their chances of getting a good loan package.

How Much Can You Afford to Spend?

The biggest mistake that some homebuyers make is purchasing a home they cannot afford. Many assume that since their mortgage application was approved, they can meet the expenses of homeownership. On the contrary, some lenders regularly approve questionable loans.

Obtaining a pricier home may sound appealing; however, the risk of foreclosure is higher. Aside from affording your monthly mortgage payment, you must have the funds for utilities and unexpected expenses that arise.

Get Pre-Qualified for a Home Loan

Getting pre-qualified for a mortgage before beginning your search will speed up the home buying process. A pre-qualification provides an idea of an affordable mortgage amount. Thus, you avoid touring homes and neighborhoods outside your budget. A pre-qualification letter from a lender does not guarantee a loan. The loan amount is contingent on income, employment, and credit verification.

Fix Your Credit before Applying

Although it is very possible to get approved for a first time home loan with poor credit, a good credit rating will open the doors for low rates and better financing options. Improving your credit is a slow process. To begin, strive to pay all creditors on time and avoid skipping payments. A key to increasing credit scores is maintaining a good credit standing. Secondly, reduce your debts. Maintain credit cards at half the maximum limit. If possible, payoff balances monthly.

Select a Good First Time Homebuyer Loan Package

Working with a mortgage broker is the best way to locate excellent first time home buying loans. Many first time homebuyers do not have extra cash for closing or down payments. A mortgage broker has access to several lenders that are willing to offer assistance for down payments and closing fees. Furthermore, if you have bad credit, a broker can match you with a bad credit or sub prime mortgage lender. The advantage of working with brokers is that you receive multiple offers. After receiving the loan application, your broker will send you up to four offers from prospective lenders

There are many mortgage loan companies out there. They seem to send you an email daily, tempting you to fulfill your largest dreams of a new home. But, when is the right time to purchase a home and what should you look for when you do so? There are many things to think about and they all center on one major thing. That is that you need to purchase a home loan that is the most affordable solution for your needs. The lowest cost is the most ideal way to go, right? So, how do you find this?

You will want to compare your options to learn who is willing and able to give you the lowest price on your home purchase. Now, because virtually everyone has to purchase a mortgage loan to purchase a home, it is important to take the time to look for these key ingredients in a low cost home purchase.

The interest rate of the mortgage loan is essentially the most costly of the whole purchase. You need to find the lowest rates out there if you are going to save money. To do this, compare and contrast the various options that you have from various lenders. Make sure you take the time to look at all your options including fixed rate and adjustable rate options, FHA, VA and conventional style options, as well as other options you will find along the way. This will save you a great deal of money in the long run.Next, take a look at the terms of the mortgage loan that you are applying for. This is the length of time that it will take you to pay off the homes loan. This can be longer if you need to lower the monthly payment of the home. If you want to save money, though, you may want to go for a larger monthly payment and secure a shorter term as the longer it goes, the more interest it accumulates.Fees and down payments also play a large role in the mortgage loan that you choose. Here, youll want to look for low costing fees, sometimes you will find a lender that is offering you a lower rate of fees but higher interest rates. Compare this to determine the best option for your needs. When it comes to down payments, carefully consider them. If you can afford them, this is a large help in the overall cost of your homes loan. If you dont have one though, you can still qualify for many of these lending options.

When purchasing a home, it is important to get it for the best price that you can. Why would you want to spend too much on the interest and terms of a financing when you can actually save money and use it to furnish your home, decorate your home or even doing some remodeling? Look at many of your options and compare what they can actually do for you. The mortgage loan you choose is going to cost you unless you do take a closer look.

An interest only mortgage is a type of mortgage where you will pay only the interest and does not repay the principal amount for a period of time and during this period; the loan balance will remain the same.

In twenties this type of loan was normal, as it worked fine as the home did not lose value and the borrower does not lose his job, but when there was depression in thirties that made these loans to get into the foreclosures, and the lenders stopped giving this kind of loans, as they wanted the loans that are repayable.

Today interest only loans are available for a period of 5 years only and at the end of the period, the payment is collected to the full amortizing level. The longer the interest only mortgage the larger the new payment when the term gets over, these interest only mortgages are especially for those who wanted to make less initial payment and has great confidence that they can make the huge amount when the mortgage term gets over.

With interest only mortgage the monthly payment you make gets covered for the interest alone but not the principal that is the amount you have borrowed , so at the end of the mortgage period you have to make ready the entire principal amount , for this you may have to make arrangement to save extra funds in the investments you make, so that you have sufficient funds to repay the principal amount at the end period of interest only mortgage term.

To make up these principal payment at the end of interest only mortgage you can invest your amount in tax free individual savings account (ISAs) , Tax-efficient pension plan and endowment policies, for this you need to talk to your independent finincial advisor who can help you to find the right investment as they are experts who advice or sell the policies offered by insurance companies, building socities and the banks.

In this interest only mortgage you would be paying only the interest and the principal amount you have borowed remains the same even after 25 years, but during this time your investment should have grown enough to pay off your principal amount of mortgage.

Mostly interest only mortgage are offered on Adjustable rate mortgage and sometime they are also found on fixed rate mortgage. This interest only mortgage is suitable for those who has regular income and can make small payment regularly but at time when they get bonus or any sporadic income they can pay back the principal with this way the borrower can end up his interest only mortgage loan.

If you are looking to purchase a home or refinance the one you are currently living in, but believe this may not be a possibility for you because you have bad credit, think again.

Just because you have bad credit does not mean you will not be able to receive a mortgage. In fact there are many lenders out there across the United States that are know as wholesale lenders that specialize in lending money to people with bad credit.

The names of these wholesale lenders may not ring familiar to you because they are not the typical lending institutions you see on the street corners of your town, otherwise know as banks.

The first thing you will need to do is locate a few of these wholesale lenders and shop around for a deal you believe to be fair. If you do not have success finding these lenders on your own, you may want to consider using a broker and have them shop around for you.

A broker is not a lender. What they do is assess your situation, than shop around for a lender that deals with bad credit mortgages.

Brokers have access to hundreds of lenders across the country and they can usually find one that has a program that may fit your needs.

Using a broker may not be such a bad idea, they are usually very experienced in their field and will not only find a bad credit mortgage lender for you, they will also council and educate you along the way.

Keep in mind, just because your credit may be less than perfect, does not mean that you are at the mercy of the mortgage companies, you are not.

Mortgage companies are very competitive, especially among the wholesale lenders, so be sure to shop around. Dont limit yourself to contacting only one broker, say no more than four. Allow for each to assess your situation, than base your consideration of which one you will use on the rate and program that they offer you. Good luck.