First Time Home Buyers Advice And How To Qualify For A Mortgage

This ARTICLE On First Time Home Buyers Advice Was PUBLISHED On November 18th, 2019

Buying your first home is a very exciting time.

  • A home purchase is most people’s largest investment in their lives
  • Many plans many months and/or years to prepare to buy their first home
  • One of the most commonly asked First Time Home Buyers Advice is how much do I need for the down payment and closing costs?
  • First Time Home Buyers Advice by mortgage and real estate professionals is to get qualified for a mortgage as soon as possible
  • It does not matter whether you have the proper down payment and/or closing costs
  • The sooner you consult with a loan officer, the better
  • The loan officer will get borrowers a plan on how to prepare their credit and finance in qualifying for a mortgage

In this article, we will cover and discuss First Time Home Buyers Advice by mortgage professionals.

Do I Need To Hire A Credit Repair Company If I Have Bad Credit To Qualify For A Mortgage?First Time Home Buyers Advice

An experience loan officer will give First Time Home Buyers Advice never to hire a credit repair company to qualify for a home loan.

  • Hiring credit repair companies can often backfire on borrowers
  • Borrowers do not have to pay outstanding collections and charged-off accounts to qualify for a mortgage
  • Deleting older collections and charged-off accounts does not impact credit scores
  • Before you go out and spend hundreds of dollars, please consult with a loan officer prior to planning on hiring a credit repair company
  • Credit repair can do more damage then good
  • There are ways of boosting up your credit without going through credit repair

Credit disputes on non-medical collections and derogatory credit tradelines are not allowed during the mortgage process.

First Time Home Buyers Advice Is To Educated Yourself With Housing And Mortgage Markets

One of the most important First Time Home Buyers Advice is to educated oneself in the housing and mortgage markets.

  • As mentioned earlier, a home is most people’s largest investment
  • The mortgage process can be complex and confusing
  • Not all lenders have the same lending guidelines
  • Finding out which loan program is best for you is very important
  • If you are a veteran with a certificate of eligibility (COE), you should explore going with a VA loan and not FHA nor conventional loan
  • Borrowers with lower credit may want to increase their credit scores before applying for a mortgage
  • Lower credit scores mean higher mortgage rates
  • Also, look into the type of property you may want to buy
  • Condominium?
  • Single-Family Home?
  • Townhouse? 
  • 2 to 4 multi-family unit?
  • Today, the housing market is strong
  • Housing prices have gone up for the past 3 years with no signs of a housing correction
  • Another key First Time Home Buyers Advice is how much can you afford versus how much do I qualify?
  • You do not want to buy too much house
  • Mortgage companies will not count your personal expenses such as childcare, utilities, maintenance, and other expenses when qualify your debt to income ratios

I’m so glad you asked! I’ve put together 10 tips for first-time home buyers as they tackle the home-buying process. Put these into practice today so your first home is a blessing, not a burden.

First Time Home Buyers Advice With FinancesWhat are First Time Home Buyers Advice With Finances

Chances are you will need a mortgage on your home purchase.

  • Most mortgages are 30 year fixed-rate loans
  • This is a long commitment
  • Remember that it is how much you can afford versus how much you qualify that is important
  • Make sure to try to pay off as much debt as possible
  • Create a reserve in the event something goes bad
  • Save for a down payment and closing costs
  • Down payments and closing costs can be gifted by a family member
  • Before doing anything with your credit, consult with a loan officer
  • Make sure you have a solid pre-approval by a lender before entering into a real estate purchase contract
  • Research the area
  • Interview lenders and realtors
  • Make sure you check their online reviews and meet with them in person

Make sure that it is within comfortable driving distance to work, schools, and shopping. Attend as many open houses as possible and ask a lot of questions.

Cost Of Homeownership

As a homeowner, you will be responsible for all maintenance and repairs.

  • When things break down, you need to fix it and cover the expenses
  • You do not have the luxury of contacting the landlord for a leaky faucet, or HVAC system
  • First Time Home Buyers Advice is to have reserves in case of an emergency
  • Appliance breakdowns can cost several hundred to thousands of dollars
  • Eventually, the roof, windows, and HVAC systems can break down
  • Landscaping and plowing is the responsibility of the homeowner
  • The pros of homeownership is freedom, appreciation, and pride
  • However, there are costs that come with the benefits

Your new mortgage payment can be the same and/or cheaper than a rent payment. However, there are costs associated with homeownership.

Finding The Right LenderHow Finding The Right Lender

Any borrower with great credit, income, and down payment can qualify with any lender.

  • However, many borrowers may not fall into this catergory
  • There are two types of lending guidelines
  • Agency mortgage guidelines and lender overlays
  • All borrowers need to meet the minimum agency guidelines by HUD, VA, USDA, Fannie Mae and/or Freddie Mac
  • However, mortgage companies can have additional lending guidelines called lender overlays
  • Lender overlays are additional mortgage guidelines above and beyond the minimum agency guidelines
  • This is why not all lenders have the same lending requirements on FHA, VA, USDA, and Conventional loans
  • One lender may say no while another lender may say yes

Gustan Cho Associates is one of the very few lenders with no lender overlays on government and conventional loans.

Choosing The Right Realtor After You Get Pre-Approved

Homebuyers need to get along with their real estate agent.

  • Many homebuyers get referred by their realtor through their family, friends, loan officer, or business associates
  • Make sure you and your spouse interview the realtor
  • Check out their online reviews
  • Meet with them more than once
  • Are they experienced?
  • Are they familiar with the area?
  • Do they return phone calls, texts, and/or emails timely?

Make sure to interview more than one real estate agent before pulling the trigger.

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