First Time Home Buyers
Home ownership has long been a critical step in achieving the “The American Dream.” It can also be exceptionally anxiety-inducing; it is usually the largest financial investment most people make in their lives. Obtaining a first mortgage can be overwhelming, but the experts at First National Bank Alaska understand homebuyers’ concerns and pride themselves on offering unmatched service in researching and delivering the best fit for your home loan. It’s a wonderful time to buy; Alaska home prices are ideal for the first-time buyer.
Of course, at First National, our commitment to service means that a local Alaskan Home Loan Specialist is just a click or a phone call away. And to us, local service means that First National processes your loan right here in Alaska and services it after the loan closes.
Here are a few common questions and answers to get you started if you are a first time homebuyer:
How much home can I afford?
Every situation is different, but a good guideline is that total monthly mortgage payments (including homeowners dues, insurance and taxes) should not exceed roughly 30 percent of your gross monthly income. Other factors that can influence your mortgage payment include your debt-to-income ratio, your credit rating, and the type of home loan you are pursuing. Explore our online calculators to help you get a general idea. To learn which first-time home buyer program you may qualify for, contact a First National Bank Alaska Loan Specialist.
Which is best: a 15, 20 or 30-year mortgage?
That depends on your financial situation and your goals. Of course, the longer the repayment schedule, the lower your monthly payments will be. On the other hand, a shorter loan means you’ll build equity more quickly and pay less total interest over the life of the loan. Click here to see an example of how much money you can save with a 15 vs. a 30-year loan.
What are the resources or incentives available to me as a first-time home buyer?
The Federal Housing Administration (FHA) offers first-time buyers a lower minimum down payment. For more information, visit www.fha.gov. In addition, there are several First Time Home Buyer Loan options that Alaska Housing Finance Corporation offers that often benefit First Time Homeowners. To learn what would be right for you, contact a First National Bank Loan Specialist.
Are adjustable rate mortgages (ARMs) always a bad idea?
Not necessarily. If you plan to remain in the residence for a relatively short period of time, (e.g. three to five years) the typical ARM will offer lower interest rates than a fixed-rate mortgage. However, in almost all instances, ARM interest rates do eventually go up, so if you plan to remain in the residence for more than five years or so, a fixed-rate mortgage may be in your best interests.
I’ve heard you should always pay a little extra each month on your mortgage payment, is that correct?
Potentially, yes. Doing so could save you tens of thousands of dollars in interest in the long run. If, however, you have other debt such as credit card and car payments that carry higher interest rates, it may be wise to put that money toward the higher-interest loans.
First National Bank Alaska stands out in its commitment to local service, tailored to the unique needs of Alaskans. To learn more about how we can make your first home purchase a reality, contact a First National Bank Alaska Loan Specialist today.