First Time Home Buyers

First time buyer's mortgages are usually straight repayment, fixed interest rate mortgages; some tax deductible.

First time home buyer loans allow buyers to get into a house more easily. However, just because you're a first time home buyer doesn't mean you should use a first time home buyer loan. These programs have restrictions and strings attached. While they are a perfect fit for some, first time home buyer loans are the wrong choice for others.

If you are a first time home buyer, don't let the excitement of buying your first home make you accept the first mortgage offer. Mortgage companies fall over themselves to get your business, because they know that most people tend to stick with their first lender for years.

First time buyer's mortgages are usually straight repayment, fixed interest rate mortgages; some tax deductible. This means that you borrow the amount you need for your new home and each month you pay back a specific amount comprising part principal and part interest over a ‘term', which can be anywhere up to 30 years. You will generally be expected to pay a deposit of at least 5% of the house value. This means you will have a 95% mortgage. 100% mortgages are available however due to the risk of the value of your home falling the interest rate will be higher. Most lenders will offer to lend you three times your annual salary.

These programs vary depending on where they’re offered, but the general idea is this: first time home buyer loans give financial assistance to qualified borrowers. They may do this in the following ways:

• Allow for a very low (or no) down payment
• Subsidize interest costs (they pay all or part of it)
• Offer grants
• Forgive loans
• Limit fees that lenders are allowed to charge
• Defer payments