FIRST TIME HOMEBUYER

First Time Home Buyers!

Your First Steps to Buying a Home

Buying your first home is an exciting milestone in your life, and you’ll want to be prepared for all the steps ahead to make your journey a successful one.

The first step is to determine if you are ready, both financially and mentally, to take on the responsibility of homeownership. Once you’re confident that you want to move forward, the next steps are to examine and evaluate each of the loan options available so you’re sure to get the best rates and terms possible.

Learn More

Besides being financially prepared, housing experts suggest you should plan to stay in your home for at least five years—that way you have a chance to start paying down your principal balance and reap the financial benefits of homeownership (such as earning home equity).

When deciding if you’re ready for homeownership, there are a few questions you should ask yourself:

Am I ready to commit to living in a single location for at least five years?
Am I up to the tasks of regular house and property maintenance?
Do I plan to maintain or grow my income level for the foreseeable future?

If you answered “yes” to each of the questions above, then you can move on to this final question to be sure you’re ready for owning a home:

Am I financially ready for the responsibility of a mortgage, including monthly payments, insurance, and taxes?

This is a complicated question and one you should carefully consider before deciding to apply for a loan. Some of the major financial factors involved in obtaining a mortgage for the first time include:

Credit score
Available funds for a down payment and the closing costs for your loan
BuyerReady Certification
Proof of income
Affordability of mortgage payment
Types of mortgages you may qualify for

Find out more

Assistance

Down Payment Assistance

A first-time home buyer usually qualifies for programs that lower down payment minimums from the typical 20% to as low as 3%. If you’re still concerned about covering down payment costs, there are down payment assistance (DPA) loans and second mortgage options that help new homeowners afford down payments. For example, some people opt for a deferred payment loan that must be paid if homeowners move, sell, refinance, or pay off their primary mortgage.

Similarly, some loans can be forgiven after a set number of years; however, the loan will have to be repaid if the homeowners move, sell, refinance, or pay off their primary mortgage before the set period.

There are also DPA grants that are provided by the government that don’t have to be repaid, but because eligibility requirements may vary by location, homeowners should research the local or state government programs and the qualification standards.

Closing Cost Assistance

Closing costs can also be covered by loans and grants. Like DPA, closing cost assistance can come through both government and private programs, depending on where you are purchasing your home. Eligibility is often dependent on income and the purchase price of the property. Closing costs can include attorney fees, real estate tax services, and title insurance, but sometimes sellers can help pay for these expenses via seller concessions

Tom Byrne, Loan Officer NMLS# 2151316