First Time Home Buyer Tips

by James from Mendenhall, MS, USA

Regarding first time home buyer tips: My wife and I are trying to purchase our first home. It was her parents' home and was offered to us at a great price. It was appraised at $140k six years ago and offered to us at $46k.



I have good enough credit to qualify for a USDA rural guaranteed loan with a 30 yr fixed rate, but hers is bad due to divorce issues. I would like to finance $66K to add a carport and bedroom to accommodate our growing family.

I have a lot of questions and could use some first time home buyer tips.
  1. Would the USDA loan be best for us?
  2. Is it best to have an escrow account?
  3. What type of interest rates do these loans typically carry?
  4. A gift of equity was mentioned to me but how would it apply?
Why didn't they teach this stuff in school?

Kate Answers: First Time Home Buyer Tips

Dear James, I don't have to convince you that you've landed in the right spot! I started my two websites just because this stuff is not taught in school. So let's get straight to the point with information.
  1. Would the USDA loan be best for us?

    The minimal amount of cash needed to get a USDA mortgage is very attractive to first time home buyers although the property and income eligibility guidelines can be a deterent.

    You can visit the USDA Income and Property Eligibility site for more information.

    Moreover when it comes to choosing any mortgage program, credit is of the utmost importance. By all means, help your wife restore her credit. Start today at 10 Basic Steps To Fixing Bad Credit

  2. Is it best to have an escrow account?

    Escrow accounts, also called impound accounts, include property tax and insurance in the monthly house payments. For a quick overview, go to Impound Accounts And Recurring Mortgage Closing Costs and scroll part way down the page to helpful information.

  3. What type of interest rates do these loans typically carry?

    Ask this question again when you talk with the USDA counselors but I believe, fixed rates.

    I have provided links to uncommon information about fixed rate mortgages below for your convenience. By all means, please let me know if you have more questions.

  4. A gift of equity was mentioned to me but how would it apply?

    My experience with gifts of equity has run with FHA mortgage loans and involved a relative selling a home to a family member for well under the market value. The difference between the sales price and the appraised value became the gift of equity applied to the transaction as a down payment. (FHA guidelines change from time to time so check with your lender representative to verify if this is a current option.)

    Find out more about the powerful advantages to FHA home loans here. You will love all of the information!
James, take a moment to bookmark First Time Home Buyer Tips to your favorites and visit often for more mortgage tips. You can also invite friends to comment on this page or ask another question of their own like you did.

Visit How To Buy A House for solutions based on inquiries from other Contributors just like you.

Best Wishes,

Ask Kate how to get the best mortgage rates
Ask Kate



P.S. Check out Best Mortgage Rate Blog yourself! It's an entertaining source of mortgage information. Subscribe now to the RSS feed.

Riveting Fixed, Hybrid, and Adjustable Rate Mortgage Help

Comparing Fixed and Adjustable Rates - Refinancing? Buying a house? Get current rates right here.

Get the lowest payment with this best fixed rate mortgage plan yet pay it down quickly.

The 15 year fixed rate mortgage will save thousands plus you'll be mortgage free after 180 payments!

What would you do with an extra $87,789? Meet the 20 year fixed rate mortgage.

Introducing the 25 year fixed rate mortgage combining security with a lower interest rate.

I crown the 30 year fixed rate mortgage King Of Mortgages!

Meet the 40 Year Fixed Rate Mortgage when fast mortgage pay offs aren't your cup of tea.

Are adjustable mortgage rates good or bad? It depends on your circumstances.

Plan for changes to your adjustable rate mortgage.

If the cheapest fixed rate mortgages will save you money, why pay for more?

Are interest only mortgage loans hidden adjustable rates?

Ask Kate About ARMs - Get an answer about mortgages that adjust.

ARM Ask And Answer - Questions about adjustable rate mortgages, each with a individual answer from Kate.



Return from First Time Home Buyer Tips to the Home Page found at Get-Your-Best-Mortgage-Rate.com


Click here to add a comment.

You can also ask Kate about your mortgage at Ask Kate About Buying a House.

Recent Articles

  1. Kate's Mortgage Rate Report August 11: Rates Bouncing Like a Ping Pong Ball

    Aug 11, 16 10:49 AM

    Kate's mortgage rate report for the week ending August 11, 2016: Rates Bouncing Like a Ping Pong Ball
    Mortgage interest rates have been bouncing like a ping pong ball: After last Friday's strong job report began pushing up mortgage rates, the market is now hinting at a reversal, with the 30-year hover…

    Read more

  2. Ask Kate how to avoid unauthorized mortgage rate extension fees

    Aug 11, 16 10:18 AM

    Ask Kate how to avoid unauthorized mortgage rate extension fees
    Ask Kate how to avoid unauthorized mortgage rate extension fees:

    After locking in her rate, the bank sent a Texan homeowner, Laura, notification of several thousand in fees that she must pay in order…

    Read more