Summary: With the lowest interest rates ever; hundreds withdrawn from looking for homes due to…
You’re ready to start house-hunting for your first home. As a first-time home buyer (FTHB), you have some advantages and options that might not be available to other homebuyers. The important thing is to find the right home loan for you, before you even start looking at open houses.
In This Article:
- What You’ll Need to Have for a Mortgage Application
- The Difference Between Pre-Qual and Preapproval
- How Important Is Your Credit?
- Your Options When it Comes to Home Loans
- The Home Buying Process
- Why Choose Sammamish Mortgage?
As a first-time home buyer, you probably have plenty of questions. The experienced loan officers at Sammamish mortgage have answers. We know how confusing buying a home can be and will be by your side for each step in the process.
What You’ll Need to have for a Mortgage Application
Step one in buying a home whether you’re a FTHB or a seasoned real estate buyer is to get a loan application in front of a mortgage company. You’ll need the following documentation:
- Proof of identity (photo ID and your Social Security number)
- Proof of assets (bank statements and investment account statements)
- Proof of income (paystubs or bank statements, or other records of regular income)
- Employment verification (or other proof you are gainfully self-employed)
- A credit report (a perfect credit score is not required for many home loan products)
The Difference Between Pre-Qual and Preapproval
A prequalification, or pre-qual, means you’ve provided information about your income, assets, and employment, but it hasn’t been verified and you don’t have a loan offer. As a FTHB, you’re far better off with a prequalification letter.
To get a prequalification letter, you’ll need to apply for your mortgage, provide all of the information listed above, and allow your loan officer to pull a credit report. The loan officer and loan processor will gather and verify all of your documentation, and give you a preliminary approval along with a letter to that effect. You can show the letter to home sellers.
Since the preapproval represents a complete loan application process, it’s superior to a pre-qual, which only means that based on your own reporting, you should qualify for a loan. Sellers are more likely to take you seriously with a preapproval letter.
How Important Is Your Credit?
Your credit score is a factor in your ability to buy a home as a FTHB, but it’s not the only factor. Lenders look at the whole picture, and there are programs for homebuyers with less than perfect credit. You can build up your credit if your loan officer tells you it’s really too low for a good home loan, but in most cases we can find a home loan product that will work for you.
The usual issue with low credit is that you might have to come up with a higher down payment. Alternately, you could buy a home with a low down payment and a fair credit score, and just pay private mortgage insurance (PMI) to help protect the lender until your home equity grows.
Your Options When It Comes To Home Loans
You may opt for any of the following when it comes to your basic home loan. As a FTHB, talk to your loan officer about special programs that could help you with your mortgage.
- Conventional fixed rate loans are a good choice if you have good credit and a decent down payment. You can get an excellent rate and the mortgage will be for 20, 25, or 30 years.
- VA loans are available to military personnel and spouses, and may have no down payment required at all. If you qualify, this is a great option for FTHBs.
- FHA loans are another popular choice for first-time homebuyers. You can get a low down payment if your credit is poor, and an even lower one if your credit is good.
The Home Buying Process
You’ll work with your loan officer and a transaction coordinator as you gather and provide information. The loan processor and underwriter will shepherd your loan through the approval stages. You’ll be asked to perform a few tasks and arrange several things as the loan moves through separate stages.
Tips for getting through the homebuying process:
- Find a good agent to look out for your interests
- Make an offer that includes your preapproval letter and a personal appeal to the seller
- Put up the earnest money required to take the home you want off the market
- Pay for appraisal and inspection
- Lock in your rate with the help of your loan officer
- Make sure you’re protected with contingencies in case the sale falls through
- Review and sign your closing disclosure at least three days before closing
- Sign the final purchase agreement for your home
- Pay all of the necessary closing costs
The underwriter will be the person who approves your loan. At Sammamish, we know a lot of the legalese surrounding your home loan can be unsettling. Don’t worry, we’ll make sure you understand everything you are signing and will keep your buying process on track.
Why Choose Sammamish Mortgage?
At Sammamish,we welcome first time home buyers and are excited about the possibilities in store for you as you hunt for and buy your dream home. We’ll keep you informed of your application’s process so you’re never wondering what’s going on or if there’s a problem with your documentation or loan.
We’ll even stay in touch with your agent to make sure they are taking care of business on their end, and coordinate as many things as possible for you so you don’t have to be stressed.
Sammamish Mortgage has been in business since 1992, and has assisted many home buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon and Washington.
Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.