Minnesota’s home-buyers market is at an all time low, which is good news for any home buyer and great news for first time home-buyers. There are tons of homes on the market, and with so many different properties for sale you have a great chance at choosing your perfect starter home or finding the home of your dreams. If you are a first-time home-buyer there are even bigger advantages to buying a home today; you qualify for special incentives put in place to help ensure you succeed with your purchase.

Rarely can a person pay for their home in cash at the time of the sale; therefore you must take out a mortgage on the home you are buying. Typically you will make a down payment of up to 20% of the homes price, and sometimes less if you qualify for first time home-buyers perks. Once you make the down payment you will need to borrow the rest of the money from a bank or other lending institution.

Most likely the largest amount money you will ever borrow will be your home mortgage. If you are looking to purchase a ninety to one hundred thousand dollar home, you will probably be looking at getting a mortgage note around seventy or eighty thousand or more. You will make monthly payments to the lender that will be a combination of principal and interest. In the beginning, most of the monthly payment will actually be going towards the interest accumulated on the loan, thereby not actually reducing the principal amount.

That being said, you want to find a favorable loan that offers the lowest interest rate. This will ensure the cost of your home will be as low as possible, and it will also help make it so your monthly payments actually reduce your principal debt and will not just be going towards the interest. A fixed rate home mortgage is a wonderful option because it guarantees that the interest you are being charged will always be the same as long as you are paying off the mortgage. If you take out a 30-year mortgage to pay for your home with a 5% interest on the unpaid principal every year, it does not matter if interest rates rise to 10 or 15 percent. No matter what happens you are guaranteed that 5% mortgage rate.

Another type that is not as favorable is the adjustable mortgage. As the name implies, the rates adjust to the national average every year or two. So if national interest rates rise, your home mortgage interest rate will increase. If your interest rate increases, so will your monthly payment because it reflects the entire loan and the interest terms that came with it.

Interest rates are at an all time low right now and this is one of the best times in the market to get a fixed rate home mortgage. Houses themselves are at an all time low also. You could have piece of mind knowing you bought a house at an unbeatable price, and the mortgage you took out to pay for the house has an awesome interest rate.

This entry was posted on Tuesday, August 4th, 2009 at 3:11 am and is filed under Mortgage Loan Rates. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.