Buyers Buying First Home
This Blog On Buyers Buying First Home Was Written By Gustan Cho NMLS 873293
Seeking the proper advice when home buyers buying first home is extremely important. There are so information for home buyers buying first home need in seeking the right home purchase advice. Many buyers buying first home for first time buyers often do not know who to turn to and get conflicting home purchase advice for first time buyers, even from loan officers and realtors. This blog on home purchase advise for first time buyers was published to help folks who have made a decision to purchase a new home. Whether you are buying your first home or you have experience in buying homes before, there are many things home buyers need to think about and consider throughout the home buying process. Home Purchase advice for first time buyers is that they need to realize that the home buying and mortgage process is not as complicated as it seems. We will try to list some basic home purchase advice for first time buyers on this article.
Chances are that the reading your are reading this blog is because you have decided on buying a new home and are looking for home purchase advice for first time buyers. I like to congratulate you on making the decision on buying a new home.
Choosing Your Team To Help You With The Home Buying Process
Buyers Buying First Home should seek as much advice and tips as possible.
- Many real estate professionals will tell you the home purchase advise for first time buyers that you will be making one of the largest investments of your life.
- It is extremely important that home buyers understand the overall home buying and mortgage process due to the many factors involved.
- However, home buyers do not need to worry because they will not be stranded and will have a team of professionals who will guide them the right way throughout the whole home buying process.
- Home buyers worries and stress will be relieved and the home buying process can be an enjoyable memorable and rewarding experience and event with the assistance of the home buyer’s realtor and mortgage loan officer.
- Besides working with the real estate agent and a mortgage loan officer, the home buyer may also have an attorney represent them.
- There are states like Illinois where most home buyers are represented by real estate attorneys and there are other states like Florida and California where real estate attorneys are not used and the title company handles all the work with the help of the real estate agent.
What Will My Real Estate Agent Do For Me?
Real Estate Agents are licensed professionals who represent home buyers and home sellers for a living and are familiar with the properties that are listed in the areas they represent. Real Estate Agents will not just know the homes that are listed on the MLS but will also be very familiar with the neighborhoods, schools, shopping proximity, and other things about the area on the neighborhood you are targeting in buying a home. A home buyer does not have to pay any fees or commissions to the home buyer’s real estate agent. It is the responsibility of the home seller to pay the realtor’s commission on a home sale which is normally 6% of the sales price of the home. That 6% realtor’s commission is then split up 50/50 between the listing real estate agent of the property and the home buyer’s real estate agent.
Here are other duties your real estate agent will do for you:
- Interview you and/or your spouse and make a list of factors that are important to you and your family.
- Areas and neighborhood, minimum square footage of the home, maximum purchase price, property taxes, proximity to schools, proximity to major expressways, proximity to stores and shopping center, proximity to churches, police, fire, parks, and other places of interest of the home buyer.
- With the information the real estate gathers, the realtor will start eliminating the homes that do not fit your criteria and will select those that match your needs and price.
- The real estate agent will assist you and offer their opinions on what they think is a good investment and those the realtor feels may be overpriced.
- The real estate agent will help you negotiate the home purchase transaction.
- Real estate agents have a network of professionals where they can always recommend you to any service providers you may need.
- Real estate agents have data bases for loan officers, insurance agents, real estate attorneys, title companies, home inspectors, contractors, and other professionals in the home buying process.
What Can I Expect By My Loan Officer?
Choosing The Right Mortgage Loan Officer is one of the most important decisions in the mortgage process and a top home purchase advice for first time buyers. You need to do your own credit and financial evaluation and choose a lender that is best suited to handle your home loan. Not all lenders are alike and most mortgage lenders have their own mortgage lending requirements which is called lender overlays .
What Are Lender Overlays?
CrossCountry Mortgage NMLS 3029 has a national reputation of not having overlays and being able to close loans in 21 days. Here are what overlays are for borrower to better understand the importance of not having lender overlays:
- Mortgage lender overlays are lending requirements that are in addition to the minimum mortgage guidelines required by FHA, VA, USDA, FANNIE MAE, and FREDDIE MAC.
- If you are a borrower with 800 FICO credit scores, low debt to income ratios, and no derogatory items on your credit report, you do not have to worry about choosing a specific mortgage lender and can get qualified and approved anywhere and all you have to do is rate shop.
- Unfortunately, this is not always the case and many borrowers do carry some baggage and do have issues such as lower credit scores, collection accounts, charge off accounts, prior bankruptcies, prior foreclosures, tax liens, judgments, higher debt to income ratios, and other credit issues where they need to find a loan officer and mortgage lender that specializes in tougher to do loans.
- There are many mortgage lenders that do not have lender overlays.
- You do not have to pay off outstanding collection accounts or charge off accounts to qualify for a FHA Loan under HUD 4000.1 FHA Handbook which is the newest sets of FHA Guidelines that outlines the most recent FHA Lending Requirements.
- However, many lenders will require additional FHA requirements that surpass the minimum FHA Requirements.
- You can search online for keywords such as FHA Lenders With No Overlays or FHA MORTGAGE LOANS WITH NO OVERLAYS and you should get a list of reputable FHA mortgage lenders who do not have any lender overlays on FHA Loans.
- You can also ask your real estate agent for a referral of loan officers they can recommend or your attorney or accountant.
Choosing The Right Mortgage Loan Officer
Over 70% of my borrowers at The Gustan Cho Team at CrossCountry Mortgage are borrowers who either gotten a last minute mortgage loan denial or are currently going through a stressful mortgage process with their current lender. The only reason for a last minute mortgage loan denial or major stress during the mortgage process is because the mortgage loan originator has not properly qualified the borrower. There are two reasons for this:
- The mortgage loan officer did not know their mortgage lending guidelines : Mortgage loan officers need to know the basic mortgage lending guidelines on the mortgage loan program they recommend their borrowers.
- For example, there is a two year waiting period to qualify for a FHA Loan after a Chapter 7 Bankruptcy discharged date and there is a four year waiting period to qualify for a Conventional Loan after a Chapter 7 Bankruptcy discharged date.
- There is a three year waiting period to qualify for a FHA Loan after a foreclosure, deed in lieu of foreclosure, and short sale.
- There is a four year waiting period to qualify for a Conventional Loan after a deed in lieu of foreclosure and/or short sale.
- There is a seven year waiting period to qualify to qualify for a Conventional Loan after a standard foreclosure.
- If you had a mortgage part of your Chapter 7 Bankruptcy discharge, there is a four year waiting period to qualify for a Conventional Loan from the discharged date of your Chapter 7 Bankruptcy discharged date no matter when the foreclosure and/or sheriff’s sale was. The foreclosure recorded date could have happened after the Chapter 7 Bankruptcy discharge date and the borrower can still qualify for a FANNIE MAE/FREDDIE MAC Conventional Loan because the waiting period start clock on Conventional Loans starts from the discharged date of the Chapter 7 Bankruptcy discharged date and not the recorded date of the foreclosure, deed in lieu of foreclosure, or short sale date.
- For FHA Loans, it is different. If you had a mortgage as part of your Chapter 7 Bankruptcy discharge, the waiting period is three years from the actual recorded date of the foreclosure, deed in lieu of foreclosure, or short sale date and the discharged date of the Chapter 7 Bankruptcy does not matter.
- Same with other government loan programs where the waiting period time clock does not start until the actual recorded date of the foreclosure and deed in lieu of foreclosure.
- The waiting period starting from the discharged date after the Chapter 7 Bankruptcy discharged date only applies to Fannie Mae and Freddie Mac.
- The mortgage loan officer did not know their company’s lender overlays: Just because a borrower meets the mandatory minimum mortgage lending guidelines of FHA, VA, USDA, FANNIE/FREDDIE, does not mean that a loan officer can get the borrower approved and their mortgage loan closed.
- Most mortgage lenders have their own lender overlays which are additional mortgage guidelines that are above and beyond those of government and/or FANNIE/FREDDIE minimum lending guidelines.
- For example, to qualify for a 3.5% down payment FHA Home Purchase mortgage loan only requires a 580 FICO credit score. Many mortgage lenders do not care about what the minimum FHA Credit Score requirements are and may require the borrower to have at least a 640 FICO Credit Score.
- FHA does not require borrowers to pay off outstanding collection accounts and charge off accounts.
- However, most mortgage lenders will have overlays on outstanding collection accounts and charge off accounts and if a loan officer is not aware that the mortgage company he or she works for has overlays on collections and charge offs, this could be a deal killer.
Buyers Buying First Home Should Know What To Expect From Loan Officer
Buyers Buying First Home should know what to expect from their lender. The most important person in the entire home buying process is your mortgage loan originator. Not only does your loan officer need to be knowledgeable in all aspects of your mortgage process, but you as the borrower needs to get along with your loan officer. Your loan officer is in charge of making sure that you have your mortgage loan approved and be on top of the mortgage process from the time of application until the loan gets a clear to close and closed. Here are some of the things that you should expect from your loan officer:
- You loan officer needs to offer you the best mortgage loan program that is best suited for you and your needs.
- Be readily reachable via phone and email 7 days a week. One of the biggest complaints by borrowers against their loan officers is that the loan officer does not return phone calls and/or emails promptly. I have heard horror stories where loan officers have not returned phone calls to real estate agents and borrowers in days.
- Your loan officer should be available at all times to answer any questions that you may have. Best way for a loan officer to explain complex mortgage questions is through using case scenarios.
Home Buyers Buying First Home in need of home purchase advice for first time buyers, please do not hesitate to contact me at 262-716-8151. Text me for faster response or you can always email me at email@example.com. I am available 7 days a week, evenings, weekends, and holidays. CrossCountry Mortgage NMLS 3029 is a national Fannie Mae, Freddie Mac, Ginnie Mae Direct national mortgage lender licensed in 50 states and headquartered in Brecksville, Ohio. CrossCountry Mortgage has a national reputation for no overlays and closing loans in 21 days.