prepare to buy your first home

Placer Hills Real Estate

Prepare to Buy Your First Home

Fixed rate mortgage• The same interest rate for the life of the loan

Adjustable rate mortgage (ARMs)• Very low introductory rate for 5-7 years• Much higher rate after 5-7 years• For short-term buyers or those planning to

“flip”• Can be dangerous

Learn About Mortgages

Fees paid to the lender

One point equals 1% of mortgage value

Required if buyer has less than 20% down payment

Can be used to buy down mortgage rate

Mortgage Points

Fixed Mortgage Rate Averages

1974 1979 1984 1989 1994 1999 2004 2009 20140

2

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10

12

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16

Rate Points

Information based on Freddie Mac survey datahttp://www.freddiemac.com/pmms

Sample Fixed Rate Payments

Loan Product Rate

Number of Payments

Monthly Payments Total Paid

15 Year Fixed

3.11% 180 $1,739.71 $313,147.80

30 Year Fixed

3.88% 360 $1,176.31 $423,471.60

$250,000

Lender Rates are influenced by credit scores.Plan for a 20% down payment to avoid cost of points.Add taxes and insurance premiums.

Buying Is a Huge Decision

Be patient

Be sure you are ready

Determine how much house you can afford

Get your credit in shape

Save for your down payment

Get mortgage pre-approval