First-Time Homebuyers Mortgage Loans And Programs

This Article Is About First-Time Homebuyers Mortgage Loans And Programs

Gustan Cho Associates are experts assisting first-time homebuyers on First-Time Homebuyers Mortgage Loans And Programs. A rough estimate shows about half of our clients are first-time homebuyers. The homebuying process can be incredibly confusing. This blog will go over examples of questions we receive from our first-time homebuyers. Many of our clients are not aware that you are once again considered a first-time home buyer if you have not owned a home in the previous 36 months (3 years). Many of our clients purchased homes prior to the real estate crash of 2008, where the mortgage guidelines were very different if you could even call them guidelines. Since then, the federal government has stepped in and created very standard and incredibly confusing mortgage guidelines. This is where Gustan Cho Associates will step in and clarify any questions you have. In this article, we will discuss and cover First-Time Homebuyers Mortgage Loans And Programs.

Understanding First-Time Homebuyers Mortgage Loans And Programs

First-Time Homebuyers Mortgage Loans And Programs

Our team is assembled like a highly efficient assembly line. The first step of the process is to go over your qualifications with a licensed loan officer. Our skilled loan officers are here to assist at your pace and answer all questions you may have surrounding the home buying process. It is our goal to make sure you are educated throughout the entire mortgage process. We will now spend some time going over typical questions that first-time homebuyers ask.

Many first-time homebuyers will want to know if the time is right to buy a home. Recently, I heard a response that caught my ear to this exact question. A realtor in the Denver area made a joke saying the best time to buy a home was “yesterday”. If you have been paying attention to the news, you will know that home value appreciation has been going up at historic rates. Meaning after you purchased a home, you could see gains in value in a short period of time. If you are renting, you know you are helping your landlord build equity in their property as well as an income stream. It’s time to start paying rent and start building equity in your home.

The Importance Of Credit On First-Time Homebuyers Mortgage Loans And Programs

Next, we hear if my credit good enough to qualify? Gustan Cho Associates are a unique mortgage lender that does not have lender overlays to overcomplicate mortgage qualifications. Many banks will have extra strict lending requirements on their Conventional, FHA, and VA mortgage loans. Many banks require a 640 or 660 credit score to qualify for a mortgage loan. However, Gustan Cho Associates specialize in programs for individuals with less than perfect credit. That being said, Gustan Cho Associates require a 580 credit score for a low 3.5% down payment on an FHA mortgage. We even have programs that allow credit scores all the way down to 500. If you are in need of a conventional loan, you will need a minimum credit score of 620.

Should a real estate agent and attorney be involved? While it is not our department to tell you to use a real estate agent or an attorney, we can point you in the right direction. Most times it does make sense to utilize a real estate agent so you can make sure you are getting the most competitive offer accepted. However, there are times where you may buy a house from a family member where it does not make sense to utilize a real estate agent. You want to check local and state requirements to know if an attorney should be involved or not.

Types Of First-Time Homebuyers Mortgage Loans And Programs

What programs are available for first-time homebuyers? This question can vary depending on the state and municipality you are looking to purchase a home. There are many local programs that may offer down payment assistance. While nothing in this world is free, down payment assistance can help you get into a property as a first-time home buyer. Most of the time, you will pay a slightly higher interest rate to get help with the down payment. Keep in mind there are extra credit and income requirements to utilize most down payment assistance programs.

Fees And Costs For First-Time Homebuyers

Fees And Costs For First-Time Homebuyers

Are there hidden costs I should be aware of? Just like any investment, there are definitely things to keep in mind. When you rent a home, you rely on your landlord for maintenance and emergencies. When you own your home, you want to make sure you have money set aside for repairs, utilities, insurance, yard maintenance, and a potential increase in insurance and property tax costs (which will raise your monthly payment). As property taxes rise, rent costs do as well. Something to keep in mind if you are weighing your rent versus your own options. 

How much are closing costs? This is a very common question, and the easiest answer is the closing cost can range anywhere from 2% to 6% of the loan amount but this will vary dramatically. Some factors that can change closing costs are the type of loan, loan amount, local tax rate, local title fees, and third-party charges. To get a better understanding of fees in your area, reach out to our team. We will get you an estimate from a licensed loan officer.

Closing Costs On Home Purchase Transactions

Are there programs to help pay closing costs? As stated above, many first-time homebuyers are able to take advantage of the down payment assistance programs. However, the seller can also help pay all or a portion of your closing cost as long as this is negotiated in your purchase contract. It is not uncommon for a first-time home buyer to ask for seller credit to help absorb the closing costs. Having extra money for moving costs is a plus. This is when a real estate agent can come in handy. They are able to negotiate with the sellers to pay all or a portion of your closing costs to help you with future home ownership expenses.

How Much Homes Can I Qualify?

How much loan can I qualify for? This is a very loaded question as each individual will have different mortgage qualifications. There are three main pillars of qualifications first-time homebuyers need to be aware of. The pillars are credit, assets, and income. Your credit profile along with monthly obligations will affect how much of a mortgage payment you will qualify for. Assets available for the down payment and closing costs will also increase your buying power. And income will determine your overall debt to income ratio and let you know exactly what your qualifications will be.

Getting Qualified And Pre-Approved

Getting Qualified And Pre-Approved

Once pre-approved, how long does the mortgage process take? Once you are preapproved it is between you and your realtor to find a home and get under contract. Once you are under contract, that’s where Gustan Cho Associates come back into the equation. Typically, we ask for a 30-day timeframe to close your mortgage transaction. However, it is not uncommon for a seller to ask for 45 or more days before closing the transaction.

Down Payment Required To Purchase A Home

Do I need a 20% down payment? Absolutely not. Needing a 20% down payment is a common misconception in the mortgage industry. There are low-down payment assistance options available. An FHA mortgage loan only requires a 3.5% down payment (with a 580 credit score or higher) and if you served any time for the military, typically no down payment is required. If you are able to put down 20%, you will eliminate the need for private mortgage insurance. For more information on private mortgage insurance please reach out to Gustan Cho Associates on 630-659-7644 or email [email protected]

I’ve had derogatory credit in the past, can I qualify for a mortgage loan? The short answer is yes. We will need more information on the type of derogatory account and how long ago the account was delinquent. We are even able to help families inside of a chapter 13 bankruptcy obtain mortgage financing. We specialize in lower credit score mortgage lending because we do not have overlays. Each derogatory event will have different waiting periods before you qualify, so reach out to our team today to go over your specific credit events. 

Qualifying And Getting Approved For First-Time Homebuyers Mortgage Loans And Programs

If you are a first-time home buyer, or a repeat home buyer and have additional mortgage questions, you can reach out to the Gustan Cho Associates seven days a week. Feel free to call Mike Gracz on 630-659-7644 with any mortgage-related questions. You may also email Mike at [email protected]. Our team is ready to assist you and your family buy your first home. There are very few situations we have not come across in the past and would love the opportunity to help you and your family. Even if you have been turned down by a different lender, we encourage you to get a second opinion today. If we are not able to assist you, we will set you up with a custom financial plan to qualify as soon as possible. We look forward to assisting you with your mortgage needs.

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