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A Personal Look at a First Time Homebuyer

A Personal Look at a First Time Homebuyer

Around the time my wife Janice and I celebrated our fifth wedding anniversary, we had finally saved enough money to put a down payment on a house. My parents invited us over to dinner the following week to celebrate our decision.

My father personally congratulated me and then asked where I was looking to secure a mortgage. When I told him I hadn't decided, he suggested his loan officer Vince. He said he would call him up for me the next day and see about introducing us. I didn't know it at the time, but this turned out to be the greatest anniversary gift my parents could have given Janice and me.

As Janice and I walked into the mortgage company a few days later, I remembered visiting the place with my father years before. Vince shook our hands and offered us some coffee. He was just as friendly as I remembered. As he began explaining our options, I became more and more impressed with how well he knew his business.

He said there were literally hundreds of unique mortgage programs out there, each designed with a different borrower in mind. For instance, if Janice had wanted to qualify by herself, Vince said, she could have applied for one of the programs specially designed for self-employed people. On the other hand, he had gotten Dad an excellent deal through a Veterans

Administration (VA) program which he'd qualified for as a Vietnam Veteran.

Janice and I qualified for several different mortgage programs. Vince explained the difference between fixed and adjustable rates and let us know about the interest-only options available. Because we had money for a down payment, we didn't need to pay the higher rates associated with 100% financing or take out a second mortgage at the same time as the first. Vince explained that was called an 80/20 since the first loan was for 80% of the home's value and the second mortgage was for 20%. I was relived to know that, thanks to our ability to make a down payment, we would be able to finance our home with only one loan. Vince suggested that a Federal Housing Administration (FHA) mortgage or a program through our state's housing and development authority might

be the easiest option for us. He explained that these loans were insured loans, backed by the government, which was why a lender would be more willing to let a first-time buyer borrow. We would have to pay an up-front mortgage insurance premium, but our interest rate would be good.

This suggestion turned out to be even more valuable, because through one of the programs designed for first-time homebuyers, we were able to qualify for a larger loan amount than we'd thought. In our case, it meant the difference between a three or a four bedroom house.

That was three years ago, and today we are still very happy with our mortgage and the choices Vince helped us make. We're thinking of adding a patio to our house and just might be calling him soon to see about a home equity loan.

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