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Bad credit mortgage loans are also called sub prime mortgages and these loans are offered to the homebuyers with poor credit rating. Usually conventional loans are not offered to the homebuyers with poor credit. The risks of default with bad credit mortgage loans are much higher. So quite naturally, the rate of interest associated with bad credit mortgage is much higher.

Owning your first home can indeed be a thrilling experience. Since you are a novice, chances are quite high that you may commit mistakes which may prove to be very costly. Here we discuss about some tips that you must follow while purchasing your first home.

Calculate your affordability

There are many of us who look after our aged parents. Well, this can really prove to be a great thing to us when speaking of taxes. As long as you and your aged parents meet the required criteria, tax laws are ready to offer you help. In order to receive any kind of tax help from the IRS regarding your elderly parents, you will have to make sure that you can claim that person to be dependent on you. Apart from this, any dependent must meet certain tests.

The sub-prime lending along with various other factors were the main reason for the economic crisis. Even now, when the economic crisis is over, we can still see the after affects of this crisis. The mortgage interest rates are quite low even now and thus it is considered to be the best time to get a mortgage. Here are some of the ways which will help you in taking advantage of the low rates:

Purchasing a home is not a thing that you do quite often in your life. In other words, many of you purchase a home for the first time in your life. It may not be possible for many of you to purchase a home entirely on cash. As a first time home buyer, you can take out a suitable home mortgage loan to make the purchase. Here we discuss about some tips which you can follow before making the purchase.

Thoroughly review your finances

In the mortgage market, one common form of mortgage loan is the conventional mortgage. The most important feature of a conventional mortgage loan is that the loan is not insured by the federal government. These loans meet the funding criteria of the federally sponsored enterprises such as the Fannie Mae and Freddie Mac. Among all the mortgage loans generated in the mortgage industry, 35-50% are conventional loans. Conventional mortgage loans can be of fixed rate or adjustable rate.

Buying your first home can be a daunting task. A large number of first time homebuyers have certain misconceptions about loan pre-qualification and are often confused about it.  Take a look at the top 5 misconceptions regarding mortgage pre-qualification:

Purchasing a home is indeed a very big financial decision that one has to make. The usual practice to finance the purchase of a home is to take out a mortgage loan. Again, the size and the monthly mortgage payments that you have to make largely depend upon the down payment amount that you make. For a conventional mortgage loan, the usual down payment amount is 20% of the purchase price of the house. There are some distinct benefits of making a big down payment. Here we briefly discuss about these benefits.

Lowers down mortgage payments

When you are purchasing a mortgage loan, choices available before you are plenty. You can opt for a federally sponsored loan or a private mortgage loan. Again, you have to make a broad choice between a fixed rate mortgage (FRM) and an adjustable rate mortgage (ARM). Here we discuss about the underlying reasons behind the selection of an ARM.

Gives you chance to save money

FHA loans were mainly designed to help borrowers get low cost mortgages at easier terms and conditions. However, will time, rules have become excessively strict which has in turn frustrated the borrowers and have slowed down the real estate recovery. But the good news for condo unit owners is that the FHA (Federal Housing Administration), though presently mum on this topic, is trying to bring some changes in their condo rules. Due to their strict rules, a large number of condo units have become ineligible for low down payment mortgages.