Buying your first home is a major decision in life — but the process of obtaining a
mortgage can be overwhelming. The paperwork, requirements, and fees can be a lot to
take the first time you deal with them. Once you’re ready, the next steps are to go over
each of the loan options available so you’re sure to get the best rates and terms
One of the problems first-time home buyers deal with is failing to understand their
credit score. Before applying for a mortgage, it’s vital to thoroughly review your credit
report and resolve any errors that may appear. A stronger credit history will generally
get you more favorable terms, and a lower interest rate on your mortgage. Depending
on the lender, the minimum credit score requirements for loan qualification are often
between 620 and 640.
Another problem first-time home buyer deal with is the requirement for a down
payment — but that shouldn’t prevent you from finding your dream home. Now a days
as little as 3.5% for FHA loans, 3% for some conventional programs, or even 0% for
qualifying service-members through the VA’s home loan program is all that is required.
Speak with one of our preferred lenders to see if you qualify for these loan programs.
In addition, you will be responsible for what is called closing cost While this number
depends on your home loan’s rate and terms, experts estimate that closing costs
typically range from 2-5% of the total mortgage. So, if you take out a mortgage for
$150,000 you’ll have to pay roughly $3,700 in closing fees, although they could be
more if you pay points to buy down your rate. In some cases, you can roll your closing
costs into the final loan amount to reduce the cash needed at closing.
Contact us for a free no obligation consultation. We would love to explain all this and more.