Buying your first home is a significant decision. What do you need to know when buying your first home? Make sure you consider the following when you make the decision to buy your first home.
Down Payment Options
Down payment options vary by different types of loans. Conventional loans require 20% or more as a down payment. Other types of non-conventional loans (like FHA) can require as little as 3.5% down but will require you pay private mortgage insurance which will protect your lender against loss if you default on the loan.
Real Estate Property Tax and Homeowners Insurance
Orange County will assess a property tax on the value of your new home. You will be responsible for the property tax when billed (usually 2 times a year), or you can create an impound account with your lender that collects a monthly portion of the property tax and then pays the tax bill for you when due. One of the conditions of a lender loaning you money to purchase a home, you will be required to buy a homeowners insurance policy which protects you against loss from the result of property damage. This payment can be made in total when due or as an impound account paid to your lender.
Renting vs Buying
There are many perks to owning a home versus renting a home. Depending on your monthly house payment (principal, interest, property tax, insurance, and PMI if non-conventional loan), your house payment may be the same as your rent payment.
Mortgage Interest and Property Tax Writeoffs
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Home Mortgage Calculators
Different Types of Mortgage Products