First Time Buyers: Some Factors to Consider

Buying your first home can be an exciting prospect and owning your own property, rather than renting, can give peace of mind and a feeling of security. Before you start picking out kitchen appliances, however, consider some of the initial factors involved in buying your home.

How much money do you have to put forward as a deposit?

Most mortgage providers will request you pay up at least 5 percent of the purchase price. However, the larger percentage of deposit you are able to pay, will increase your mortgage plan options, and can get you a much better deal. The ability to contribute 15 percent or more towards your mortgage will greatly increase your options.

Set-up fees The first kind of fee you will incur is what is known as an "arrangement fee", which can either be paid up front or added to your mortgage. This fee is an arrangement fee which is used to cover administration costs.

Expect to pay a property evaluation and survey free. This fee depends on the value of the property and level of survey you choose. Choose the level of survey that you think is most suitable for the property and keep in mind that a thorough survey, although more expensive, can give you peace of mind. The knowledge that the property you are buying has no potential problems and costs after purchase can be invaluable.

Another possible fee is a search fee.  This is a local council fee for searching if there is any future planning or local problems or issue with may affect the property value. This application is usually carried out by your legal representative rather than on your own.

Lastly, legal fees need to be factored in. Your legal representative will need to be paid for the legal work carried out on your behalf.

What mortgage to go for?

Well, there are two main types of mortgages available: a fixed-rate mortgage and an adjustable-rate mortgage (ARM). Fixed-rate mortgages have the interest fixed for a set amount of years, after which the balance is paid in full or you can refinance to a new mortgage. The benefit of fix-rate mortgages is that you have a set amount each month to pay, so you know exactly how much you need to budget for each month. However, if interest rates go down, you won't be able to enjoy the lower rate. ARM mortgages will fluctuate monthly depending on interest rates. There is a minimum and maximum cap rate however, so you have some security if rates shoot dramatically up. With an adjustable-rate mortgage, most repayments are set much lower than fixed-rate mortgages, particularly at the start of the loan agreement. However, remember to budget for the increased rate after the initial adjustment period. You will need to factor that into your repayments.

Now that you are aware of the basics, you can start shopping around to see who is offering you the best mortgage loans available and the best mortgage company for your requirements. It's worth using a mortgage calculator too, which can be found online if you search keywords "best mortgage calculator".

Need help from the best mortgage consultants in New Jersey? Visit the website of The Money Store to reach a mortgage consultant that can guide you throughout the mortgage program. Also, check out refinance mortgage rate.