In any case, consider picking a mortgage with a fixed rate for the longest time that you think you'll be keeping the home. That's because you could see your monthly payments jump up on a variable rate mortgage if interest rates keep climbing. On the other hand, fixed rate mortgages start with higher interest rates so it may not make sense to pay more to lock in a fixed rate for longer than you need it.


Homeowners insurance is a contract that protects both you and your lender in case of loss or damage to your property. The contract is known as an insurance policy, and the periodic payment is known as an insurance premium. The monthly homeowners insurance premium is often included as part of the monthly mortgage payment, with the insurance portion of the payment going into your escrow account.
Once the offer has been approved, the buyer will need to secure the mortgage. This is done by complete the mortgage application. If a person has not been pre-approved or pre-qualified, it will likely take longer to complete this process. Ideally, a buyer should "shop around" for the best rates and terms. Most buyers choose fixed rates rather than adjustable rates.
Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn your music up, attach permanent fixtures, and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

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Next up on your to-do list: Apply for a pre-approval, the process in which a lender reviews your financial information—like your credit report, W2s and bank statements—and commits to giving you a mortgage for a specified interest rate. It's a good idea to consider doing this now because it can prove to a seller that you're a qualified buyer, and once an offer is made, the bank will just have to appraise the home—not the property and your finances.
Buying a home takes a lot of time -- likely more time than you figured. Exhibit "A" in this case is the "saving for a new home period." This timetable starts well before you see your dream home for the first time. To act fast on a great home purchase opportunity, you're going to need cash, and the more the better. Your chances of buying a home are greatly increased if you can show a lender you have plenty of cash saved up, and that you can meet the seller's likely demand that you can bring the cash needed to buy a home to the negotiating table. That means saving money early and often -- and starting well before you set eyes on that dream home.
A lender or broker will assess your credit score and the amount you can qualify for on a loan. He or she will also discuss your assets (savings, 401(k), etc.) and debt, as well as any local programs that might be available for down payment assistance. That's where your homework on first-time homebuyer programs can help. If you think you qualify, look for a lender that handles the program you hope to get.
The home buying process is a considerably high-stakes endeavor, especially for first-time home buyers. According to the National Association of Realtors, buyers under the age of 36 have made up the largest proportion of home buyers in the U.S. over the last four years. Of this proportion, 66 percent of the buyers purchased a home for the very first time. Whether you are a first time home buyer or someone in need of a refresher, this comprehensive guide to the home buying process is just for you.

If your available cash doesn't cover your needs, you have several options. First-time homebuyers can withdraw up to $10,000 without penalty from an Individual Retirement Account, if you have one, though you must pay taxes on the amount. You can also receive a cash gift of up to $15,000 a year from each of your parents without triggering a gift tax.
Keep your options open. Some homes might be listed as a two-bedroom, but if the square footage is in the same range as three-bedrooms you’ve been looking at. This could be a sign that it’s a hidden gem with a “secret” third bedroom. Secret bedrooms are often sunrooms that can be easily converted into a bedroom or an extra-large master that could be divided with some drywall.
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