First Time Home Buyer Essay

Introduction Buying a home is one of the largest purchases a person will make in their lifetime and having a good understanding of the mortgage process should be a priority and the first step before securing a home loan. The target market will be directed to first-time home buyers between the ages of 31 to 51 years of age (NAR, 2017). The purpose of this paper is to illustrate that many first-time home buyers’ waste tens if not hundreds of thousands of dollars on purchasing a home by simply not understanding the mortgage process. Some of the major issues facing first-time home buyers are in order of importance, not being educated beforehand on the types of mortgages available, qualifying and securing a mortgage that is within their financial means, and understanding the fine print and added costs that are involved with a first-time home purchase. Strategic recommendations will be provided to first-time home buyers to not only give them a better understanding of the of home buying process but also to show them how to navigate through this challenging and expensive

Most conventional fixed rate mortgages make up the bulk of home loans on the market. Conventional loans are fixed interest rates with monthly payments of principal and interest that usually span for 15, 20, or 30 years (Mortgage Basics, n.d.). Interest rates are fixed or adjustable (CFPB, n.d.). An adjustable-rate mortgage (ARM) is a loan with an interest rate that changes over the course of the home loan, meaning that the monthly payments can go up or down (Mortgage Basics, n.d.). Mortgage loans are organized into categories based on loan size and government program participation (CFPB, n.d.). Loans insured by the Federal Housing Authority (FHA) and Veterans Administration (VA) are government guaranteed financing programs, they help home buyers obtain low-interest and low-down-payment loans (Kapoor et al.,