First Time Home Buyers

FIRST TIME HOME BUYERS

Buying a home is a big step and local mortgage lenders are here to help.  You might be feeling a wide range of emotions as you prepare to take this step and hopefully by educating yourself on the process, you will be ready to take the plunge.

One of the first steps is getting pre-qualified for the mortgage so that you know how much you qualify for and how much monthly payment will be comfortable.  Often, these two numbers are not the same.

To get pre-qualified, you can complete an online application or you can spend about 15 minutes with us on the phone and we will discuss your employment history, income, assets, credit history and monthly obligations (debts).  Probably the two most important qualifiers are your ratios and your assets.

Ratios:  Typically, you would want your mortgage payment (including insurance, taxes and mortgage insurance) to be no more than 30% of your gross income (before taxes and deductions).  You would want your total obligations including car payments, credit card payments, student loans and your mortgage to be no more than 40% of your gross income.  These are what we refer to as your ratios.  The first is your “housing ratio” and the second, and more important number, is your “Debt-to-Income” ratio (DTI).

Assets:  Typically, you will need at least 3.5% down payment to get a mortgage.  This is the minimum for FHA loans.  Conventional loans require at least 5% down payment.  There are down payment assistance programs that can help you with the required down payment.  Also, you can typically receive a gift from a family member for the down payment.

After you have been pre-qualified, you’ll need to find a house.  A Realtor is strongly recommended as you will need a lot of help.  But, not to worry, the seller of the property typically pays the realtor fee for the buyer.  Let me know if you need an agent and I’ll be happy to recommend a great agent.

Remember, we are here for you.  I’m sure you will have lots of questions, so feel free to email or call us.  Remember, too that no one has as much vested interest in this purchase as you.   Ask questions and make sure you understand, but at the same time, don’t be afraid to trust your advisors.

Have fun home shopping.   Good Luck!

Matt & Claudia

 

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