First Home First Loan: A Big Deal
Living in your parent’s house in a specific age in life can be frustrating, both due to peer pressure and because of confines to ones privacy. Imagine bringing a date home only to have mom interrupt...talk about an awkward mood killer! To solve this problem, many of us opt to go for rental houses instead of buying our own home. While in the short run renting might seem cheaper, the fun and comfort of your first home first loan is a big deal.
Buying a home is not necessarily as simple as it sounds. The security that the ownership of such expensive assets comes with is not met without sweating a bit. For most youngsters, it is easier if you get a loan to help you foot the bill. To ensure that your first home first loan meets your needs, there are some things to be on the lookout for.
First time home buyer loans typically allow young buyers to get a house without needing a ton of money up front. This includes low down payment and no down payment options. Like many other rules and guidelines, the laws governing the terms and conditions for first home first loan programs vary form own region to another. Make sure you talk to a local mortgage consultant or housing agency so you know how these work.
The most common ways of doing this is giving little or even no down payment, offering subsidized interest costs, offering grants, forgiving loans, limiting the fee that lenders are allowed to charge and deferment of payments.
While some of the above listed twists are hurtful to you in the long run, they in reality help beginners get what they want, a home. For instance, subsidized or no deposit fee in first home first loan will allow you get going with the process even if you had nothing in your savings account to help you achieve your target.
However, there are certain restrictions that filter those who qualify for subsidized first time home buyer loans. This is so since most of the people moving out of rental homes or their parents’ houses would like to be in their own homes and therefore definitely opt to settle for these loans. The general acceptance criterion is aimed at limiting the benefits from people with low and moderate-income levels. This means that high earners will not qualify for the program.
A first home first loan might seem to be a pain that has to be avoided after all. This is not a right conclusion. At one point in life, it becomes necessary that in one way or another we benefit from the joys of owning a home. This include the security the whole venture comes with, knowing that you are in your own property that will definitely never depreciate in value can be a good investment that will bail you out of trouble in future.
Research has proved that in the end buying a home is cheaper than renting. Though buying through a loan system will have its own overpays in terms of interest part of the payment, this, compared to the monthly rental fee will be lower hence the need to venture headlong into buying if you are interested in saving more in the long run.
Apart from letting you save on rent, buying a home in the modern world can allow you benefit from subsides. Nowadays, you can in the end end up paying less than 5%. Getting into the math, if you buy a house worth $60,000 with a down payment of 5% and hope that the house appreciates at a rate of 5% per annum, it means that by the end of the whole venture you will have raised your equity by 100%.
One thing you should be on the lookout for is the fact that leverage can also work against you. It is not a guarantee that you will always emerge a s the victor in a given year. The good thing however is that if by luck the house depreciates at a rate equal to your equity then that is all what you will lose, nothing else.
Other non financial benefits in the final effects might come with is the sense of pride that comes with home ownership, steady payment rates unlike the case for rentals where rental rates might vary dynamically with inflation. Better credit opportunity, which is attained through using your home as security when applying for future loans and finally the freedom to do whatever you want with your house at any time. These are solid enough reasons to push you to buying a home rather than renting.