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Are You a First Time Home Buyer? Find Your Ideal Mortgage Loan

First time home buyer guide to success

Are you a first time homebuyer? If so, you need a residential mortgage specialist to help you through the process. It’s an exciting time, but there are real pitfalls that can impact how much you pay for your home and even whether you’re able to afford it over time. There are a surprising number of challenges to navigate during the process. Thankfully, Midland Mortgage Corporation is qualified and ready to help you get down to business.

With the Midland team you can rest assured that we will walk with you step-by-step as you consider your mortgage options. Purchasing your first home is a major financial milestone. We will analyze the details of your situation and match your needs with the best loan for your situation. With Midland Mortgage Corporation, you can also receive pre-approval before you begin shopping for your home, which will lend more power to your bargaining ability.

As a first time home buyer, there are different types of mortgages available to you, including:

30-Year Fixed Mortgage

One of our most popular home loans, the 30-year fixed rate mortgage is straightforward — from the start, you know what your payment will be for 30 years. The benefit? No payment surprises, and you can easily incorporate mortgage payments into your budget now and into the future.

The 30-year fixed-rate mortgage loan is ideal if you:
  • Desire a consistent mortgage loan payment for simple budget planning.
  • Enjoy the predictability of a monthly payment that stays the same throughout your loan.
  • Plan to live in this home for many years.

Federal Housing Administration (FHA) Loan

Insured by the Federal Housing Administration, FHA loans have less stringent qualifications and tend to be ideal for many first time home buyers. The maximum loan amount varies, depending upon the location of the home, but these loans typically have lower down payment requirements and competitive interest rates.

The FHA loan has flexible options, such as a fixed-rate mortgage or a 5-year adjustable rate mortgage (ARM), giving you the opportunity to find a loan to meet your budget needs and plan for the future.

FHA loans are ideal if you:
  • Have less than stellar credit.
  • Do not have the 20% of the home cost for the down payment.
  • Are interested in having a loan insured by the government.

Adjustable Rate Mortgage (ARM)

With the benefit of a lower beginning interest rate in comparison to traditional fixed-rate loans, the adjustable rate mortgage fluctuates according to general interest rates. This means after the introductory lower interest rate period ends, the rate adjusts to a fully-indexed rate, which typically leads to an increase in the monthly mortgage payment.

There are different options available in ARM loans, so you have some flexibility regarding how long the initial lower interest rate will last before the adjustment. It is important to be aware of the rate changes for an ARM loan, so you can prepare financially for increased payments in the future.

ARM loans are ideal if you:
  • Have future plans to sell your home prior to the end of the lower introductory interest rate.
  • Can determine with certainty that you will be able to afford the maximum monthly payment if the adjustment leads to a higher interest rate.

Have your own home but looking to purchase your first real estate investment? Midland Mortgage Corporation can help with that, too. Check out more information and get in touch with an investment specialist today.