A Quick Overview of Mortgages for First-Time Home Buyers

A mortgage, as you probably know, is the type of loan you take out to pay for your home. Unless you pay for the home in full up front, you will have a mortgage. There are a lot of terms that might be confusing or new to you as you are looking to buy your first home. We’re here to explain a few of the basics. Keep in mind, not all lenders are created equal and we work with the best. How do we know they are the best? Because we have seen them come through for their clients, go the extra mile for them which is often after hours or immediate and we have seen their communication and service they provide their clients. Let us help recommend someone, you will not be disappointed!  Here’s a quick overview of mortgages for first-time home buyers.

Types of Mortgage Loans

Fixed-Rate Mortgage

A fixed-rate mortgage has a set interest rate that is guaranteed not to change over the term. Choosing this type of mortgage will protect you from potential increases in interest rates in the future. 

Adjustable-Rate Mortgage

An adjustable-rate mortgage is subject to change over time according to changes in the market. One benefit of choosing an adjustable-rate mortgage is that the initial rate may be lower than that of a fixed-rate mortgage. But, of course, this can fluctuate. It may go even lower, but it may increase too.

Government-Guaranteed Mortgage

You may be eligible for a government-guaranteed mortgage if you are a military service member or veteran. With this type of VA loan, it is usually easier to qualify for a mortgage, and the down payments are typically lower. 

What is an APR?

APR stands for annual percentage rate. The APR is the price you pay for borrowing the money for your home. It includes your interest rate, along with the other fees you pay for your mortgage loan. These include closing costs, insurance, and lending fees.

What is an Escrow Account?

If you choose to use an escrow account, the taxes and insurance on your home will be broken up and included in your monthly mortgage payments. If you don’t, then you will pay the taxes and insurance in a large sum once or twice a year. Escrow may be a good choice for you as a first-time buyer because it will space out the payment of your taxes and insurance. Otherwise, you will be required to cover these expenses all at once, which can hurt the wallet.

Before You Make an Offer


Getting pre-qualified means you get a professional estimate of a budget you may expect to be approved for. This estimate will be based on your financial situation including debts, income, assets, etc. Your profile will be compared to similar buyers in the area who were approved for mortgage loans, and you will have an idea of a practical range for your budget. Pre-qualification is simply an estimate, and is not an offer or guarantee of a loan.


To get pre-approved for a mortgage, you’ll need to provide more financial information and submit an application for a mortgage. The process is more extensive than getting a pre-qualification, but it is worth the time and application fee. For one thing, pre-approval allows you to have confidence when applying for a home in terms of cost. Being pre-approved also shows the seller that you are a serious buyer with the means of paying for the home.

Now that you have a quick overview of mortgages, you can get started on buying your first home. My daughter and I at Shelby French Realty can help with any questions you may have and we will help guide you through the process of buying your first home.

When you choose Team French, you choose expertise, professionalism, and the most personal and caring service in the California Gold Country. We will help you every step of the way and put you in touch with the right members of our lending team. And we can’t wait to meet you and help you buy the home of your dreams. We love working with first time home buyers, especially Sarah who recently became one herself, and we have experience working with VA loans and 2nd home loans. Contact us at (209) 303-7637 or teamfrenchsells@gmail.com to get started! 

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