Most Common First Time Home Buyers Frequently Asked Questions
Factors In Qualifying For A Home Loan
Your credit score is not the only factor considered in qualifying for a home loan. Other factors include your prior credit history, credit tradelines, employment history, income and employment type, and assets for down payment on your home purchase.
How Much Money Do I Need For A Down Payment?
Another common first time home buyers frequently asked questions is how much down payment do I need for a home purchase. The down payment on a home purchase depends on the type of loan program a home buyer qualifies for. VA Loans and USDA Loans do not require any down payment from the home buyer and offer 100% financing, however, not everyone can qualify for a VA Loan or USDA Loan. You need to be a veteran with a Certificate of Eligibility by the Department of Veteran Affairs to qualify for a VA Loan and the property needs to be in a USDA approved area to qualify for a USDA Loan and the borrower needs to qualify under USDA mortgage lending guidelines.
Conventional loans require a minimum of 3% down payment for first time home buyers or 5% down payment for seasoned home buyers. FHA loans require 3.5% down payment and require a minimum credit score of at least 580 FICO.
How Much Home Can I Afford?
Another popular first time home buyers frequently asked questions is what will my mortgage and housing payments be and how much home can I afford. Consult with us and we will go over on how much home you can afford. Just because you qualify for a certain mortgage loan amount does not mean that you can afford the housing payment comfortably. Mortgage lenders do not take into account your utitlities, your extra curricular expenses such as gym membership, golf membership, child care, private schooling, and travel expenses. That is something you and your family need to discuss and make sure that you are not buying too much home where you will regret later. You need to realize that those homeowners living in the midwest or where they have severe winters, gas prices can be double or triple during the cold winter months.
How Do I Prepare To Buy A Home?
You should consult with a mortgage loan officer as soon as you decide that you will be a homeowner in the near future. You loan officer should guide you on steps to take and the documents you need to prepare. You will need to start saving for the down payment and closing costs for your home purchase. You will also need to pay down as much debt as possible and have a low credit card balance to maximize your credit scores. You will also need to start interviewing realtors that you can get along with and feel comfortable with.
Related> FHA And First Time Home Buyers