Getting a mortgage is a considerable commitment for any first-time homebuyer, which is why it’s important to know everything about it before signing with a mortgage lender. If you don’t educate yourself, you could regret it once you’re a few years in your repayment plan. Thanks to the internet, you can search up almost anything about getting a mortgage. Using this access to information to your advantage will help you be a better mortgage buyer.

Four Essential Facts About Mortgages

Thankfully, you can refinance your mortgage and perform other strategies to modify your future mortgage situation. However, it’s best to start things right with the proper understanding of mortgages in mind.

In this article, we’ll share essential facts about mortgages first-time homebuyers should know.

1. Loans and Down Payment Requirements

It’s a common understanding that a 20-percent down payment is mandatory if you want to purchase any property. However, this rule isn’t always set in stone. For example, FHA loans can demand anything as low as 3.5 percent of the full price. On the other hand, a VA loan won’t require you to give a dollar for your down if you’re eligible for the plan. If you’re still down on your luck, you can apply to payment assistance grants to give you enough cash to finance your initial down payment.

2. Principals and Interests

Most homeowners put their full attention on a mortgage’s principal and interest to decide on the right mortgage lender. Although these will be the primary variables for consideration, there are other factors you need to assess. For example, you need to account for property taxes, mortgage insurance, and even associate fees attributed to your property’s ownership. Checking these costs should be your priority before confirming if you’re financially capable of repaying your monthly dues.

3. Loans and Credit Scores

Whenever you shop for a loan, a lender checks your credit score to rank your viability as a borrower. Numerous inquiries on your credit score can cause a red flag with your bank and future mortgage lenders in certain situations. This can lead to doubts about your financial goals. However, the FICO scoring model is built precisely for shopping for several loans before committing to one that fits you.

Similar credit inquiries within 30 days all count as one instance. This means you should do all your window shopping for home loans as much as you can within 30 days. For this reason, you should plan your steps accordingly from the moment you’ve decided to buy a property. Plotting a timeline of all the tasks you have to accomplish can ensure that you’ll make the right decision when buying your first home.

4. Bankruptcy and Foreclosure

Some financial difficulties are entirely unavoidable, like a car accident or a sudden severe illness. These events can put you way back on your mortgage payments and cause you to let go of your lease on a property. You’ll either have to file for bankruptcy or foreclosure your property to pay your current debt. While this financial setback can seem grim, you can still apply for a mortgage once you’re financially stable enough to get back on your feet. Although it’s not easy, it’s far from impossible to be blacklisted from mortgages even after a major financial crisis.


While we’ve covered the basics of what you should know with mortgages, that doesn’t mean you’re fully prepared to sign with a mortgage lender. There’s no amount of strategizing you can use to get you free from a poor choice of a mortgage company. This is why you need to choose a mortgage lender that can give you dynamic options on your personal financial needs.

As the premier mortgage lender located in San Diego, California, Cal Coast Funding prides itself as the leading name in providing competitive mortgage rates paired with outstanding service. With our 20 years of lending experience, we can assist you in purchasing your first home! If you’re looking for fast and accommodating mortgage lenders in San Diego, contact us today!