What are FIRST TIME HOME-BUYER ADVICE

Home Purchase Advice For First Time Home Buyers

The Mortgage Expert
December 1, 2019 - 4 min read
Gustan Cho Associates are mortgage brokers licensed in 48 states
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This BLOG On Home Purchase Advice For First Time Home Buyers Was PUBLISHED On December 1st, 2019

Home Purchase Advice:

  • A home purchase is not like any other high ticket purchase like buying a vehicle, motorhome, or boat
  • A home purchase is not as simple as it once used to be
  • Majority of home buyers need a mortgage loan for a home purchase
  • Qualifying for a mortgage is like going through an IRS audit, maybe even tougher than an IRS audit
  • If you have made up your mind that you want to purchase a home and be a homeowner, right now will be a great time to prepare
  • If you educate yourself in the home purchase basics and the mortgage application and approval process, it is not as bad as you think
  • The home buying and mortgage process can be very smooth
  • There are several factors you need to consider and think about prior to writing a purchase offer on a home

In this article, we will discuss Home Purchase Advice For First Time Home Buyers.

Home Purchase Advice On Qualifying For MortgageHome Purchase Advice

The first step to take into consideration is to see if you qualify for a mortgage:

  • If so, how much you qualify for
  • Consult with an experienced licensed mortgage loan officer
  • See what the maximum amount you qualify for
  • You do not have to commit to the first loan officer you go to
  • Interview several loan officers and see which loan originator you feel comfortable with
  • The loan officer will ask you to complete a 4-page mortgage loan application
  • The loan officer will pull credit and run the mortgage package through the Automated Underwriting System for automated approval
  • The loan officer will get you a pre-approval on the maximum amount of mortgage the borrower will qualify for and the maximum home price they will be able to qualify for
  • Just because you qualify for a certain amount of mortgage does not mean you need to get the maximum mortgage amount

Home buyers should go over their finances and decide how much home they can afford.

Home Purchase Advice: How Much Home Can I Afford?

Once you are pre-approved for a mortgage loan and prior to going out shopping for a home, you need to give some thought of your personal finances and see how much home you can afford.

  • Remember that your loan officer qualified you on the maximum mortgage you can afford just by going over your monthly gross income and your total monthly debt payments that are being reported on your credit report
  • The loan officer does not take into account personal expenses such as the following:
    • childcare
    • entertainment expenses
    • medical expenses
    • school expenses
    • or other personal expenses
  • Borrowers need to consider the extra expenses you have and decided what the comfort level is

You can then contact your loan officer and tell him what your maximum monthly housing budget and he can tell you the maximum price range of homes you should be shopping for.

Adjustable Mortgage Rate Or Fixed Rate MortgagePrepare For The Down Payment And Closing Costs

There are many mortgage loan programs that every home buyer should think about and talk it over with their mortgage consultant.

  • First-time homeowners need to think about how long they are planning on living on their first home purchase
  • Many first time home buyers have plans to purchase their new home and stay there for short term like 5 years or slightly longer and upgrade to a larger home
  • For example, a recent college graduate or single person may decide a small one-bedroom condominium
  • They may eventually start a family and upgrade to a larger home
  • This first time home buyer may benefit with an adjustable-rate mortgage versus a fixed-rate mortgage loan
  • Mortgage rates on adjustable-rate mortgages, also known as ARM, are lower than fixed-rate mortgage loans

If you are planning on keeping your home purchase for a long term and do not want your mortgage rates adjusting after your initial fixed-rate period, a 30 year fixed rate mortgage may be the best choice for you.

Prepare For The Down Payment And Closing Costs

Once you have decided that you are definitely going to purchase a home, you need to review your finances.  Do you have the down payment and closing costs?  Do you have reserves in case of unexpected repairs? Closing costs can be offset by getting a sellers concession from the home seller or by a lenders credit.  FHA loan programs require 3.5% down payment.  Conventional loans require 3% down payment. USDA loans and VA loans do not require any down payment.  Jumbo loans require at least 20% down payment. For more information about the content of this article or other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.

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The author(s) contributing content to this site, accept no liability or responsibility for errors, omissions or changes in market conditions that may impact the readers' conclusions drawn or assumptions related to the content of this site. The copywritten© information contained on this site is provided on an "as is" basis, at the time of publication, without guarantees of timeliness, thoroughness, accuracy, or usefulness to the consumer. The content on this site does not constitute financial or professional advice of any kind, and readers are encouraged to consult their own professional advisors for professional advice.

Gustan Cho NMLS 873293 is the National Managing Director of NEXA Mortgage, LLC dba as Gustan Cho Associates NMLS 1657322. Gustan Cho and his team of loan officers are licensed in multiple states. Over 75% of the borrowers of Gustan Cho Associates (Gustan Cho Associates) are folks who could not qualify at other lenders due their lender overlays on government and conventional loans. Many mortgage borrowers and real estate professionals do not realize a mortgage company like Gustan Cho Associates exists. We have a national reputation of being a one-stop mortgage company due to not just being a mortgage company with no lender overlays but also offering dozens of non-QM and alternative financing loan programs. Any non-QM mortgage loan program available in the market will be offered by the team at Gustan Cho Associates. Our team of support and licensed personnel is available 7 days a week, evenings, weekends, and holidays.

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