Updated: Aug 29, 2021
A few weeks ago, we talked about the recent housing booms and market rates. Some of you all may be looking to buy your first home soon, especially in this current market. We want to take advantage of those low rates (but good luck finding something in this shortage!) In any case, here are some tips to help you get started with the mortgage process. This will be the first installment in the Mortgage Process series.
So, first realize that having a good credit score will open up more opportunities for you. Second, also realize that as a first-time home buyer, you have a lot of options and perks. A first-time home buyer is defined as someone who has not owned a primary residence in the last three years; or a single parent/homemaker who has only owned as a spouse. When looking, you should decide which type of house you want to buy, what you can actually afford, and how you would like to finance your purchase. We will talk more about that later. But today we are going to touch on your options as a first-time home buyer.
Usually, mortgages require you to bring at least 20% of the home purchase price to the table. But, everyone may not have the required down payment or credit score. Below are some options and resources to consider when buying a new home:
1. Federal Housing Authority-backed mortgages: These are created for low to moderate income borrowers and requires a much lower minimum down payment. They also have a lower threshold for credit scores than other conventional mortgages. With FHA-backed loans, individuals with credit scores as low as 500 may qualify. But, with a credit score of 580 or higher, your minimum down payment may be as low as 3.5%! And if you still cannot make the deposit, they have down payment assistance programs. Also keep in mind that at least two years must have passed if you recently went through bankruptcy and you cannot be delinquent on any federal student loans if you would like to be considered for this program.
2. Home Buyer Classes: There are many places that offer free homebuyer courses to educate you on the buying process. So, take advantage of this to help you navigate new waters. It can help you save money and figure out your next move (get it?...yes, pun intended).
3. State Programs: While there are federal programs offered to you, you should also check out the state programs that are offered. Click on this link to take a look at your options by state.
Okay, later we will talk more about the mechanics of a mortgage but we just wanted to give you some resources today just in case you are considering buying a home soon. Please take advantage of the options offered to you, it will only benefit you in the long run. 😊 Write to you next week!