First Time Buyer

So, you are thinking about buying your very own home? You have spent hours on line doing your research and have gathered a lot of information but you are not clear where to start. You've looked at so many pictures of houses and finally have a clear picture of where you want to live and the layout of your dream home.

Buying your first home is certainly an exciting decision of your life. Now it's time to get your ducks in a row before going to visit the homes. First, you will want cash for down payment, know your credit score, and a pre-approval letter from your loan officer.

If you plan to pay with cash, you will need to provide 'proof of funds'. Usually, a copy of your bank statement is sufficient. This will accompany a written Offer prepared by your real estate agent to submit to the sellers for review.

Or are you like most homeowners and will need to get a loan? Loans are available from your local bank, credit unions, on-line, and from Mortgage Lenders. Through my 12 years of real estate experience, I personally have come to favor credit unions and mortgage lenders. Most credit unions offer low interest rates. Mortgage Lenders specialize in home loans and are competitive to earn your business. They will sometimes offer discounts in service fees.

Before you contact a loan officer, consider how much money you have in savings, then, confirm your credit score. Having a down payment for your home is a 'must have' along with having a good credit score. Lenders will vary on how low your credit score should be, but, you will want to have the highest score possible. The higher your credit score the lower the interest rate for your loan. Generally, you will find lenders that accept a 620 score, but preferably strive to have a minimum 650 score.

You will need cash in the bank for your down payment. The type of loan will help determine how much money you will need for a down payment. If you are a Military Veteran, your down payment is 'zero'. If not, you will want at least 5% of the price of your house in savings. For example, if the purchase of your house is $200,000, you will want $10,000 in savings.

There are many different loans available. Meeting with a Loan Officer will help in deciding which loan is best for you. Two of the most popular loans are 'conventional' and 'FHA' loans. A conventional loan may require a down payment of 5% - 25% and because they are less risky, will have lower interest rates. An FHA loan will require as little as 3% down payment and will have low interest rates.

Loan officers provide pre-approval letters. While working with your loan officer, you will need to provide as much information concerning your debts and assets. This information will be needed to prepare your pre-approval letter. The letter will show that you have signed an application for a loan, your credit score, income, available cash down, payment of closing costs, and that your debts and assets have been reviewed. The other piece of information to solidify the loan will be the approval of the home you choose.

Once you have been qualified and approved for your loan, you should contact your real estate agent. At this point, you are ready to start touring homes. Your Loan Officer will provide you with a pre-approval letter that you will share with your real estate agent. When you find your dream home, the agent will help you prepare an Offer and include the letter for the seller to review.

If you are ready to own your dream home, call me, I'll be happy to help.