Buyers follow steps for buying their first home, and the steps prevent mistakes. First, they must qualify for a mortgage and find a great home. When reviewing their options, buyers get more out of their investments. Lenders can answer their questions and help them prepare for the purchase.
What are Their Credit Scores?
The buyers must have qualifying credit scores to get a mortgage to buy their first home. For a conventional mortgage, they must have a credit score of at least 620. An FHA mortgage allows for a credit score as low as 580. However, the lender will review why the consumer’s credit scores are so low, and if the borrower has a history of collection accounts, charge-offs, and late payments, the lender is less likely to approve the mortgage.
How Much Can They Pay Down?
Low-income families that cannot afford a down payment may qualify for a USDA loan. It doesn’t require them to pay any down payment for the property. However, if they choose a conventional mortgage, they will pay at least 10% down. An FHA loan requires between 3.5% up to 10% for the property. Since it will be their primary residence, they can get access to a variety of mortgages. Borrowers can get help from Dustin Dimisa when they are ready to buy their first home.
Where is the Property Located?
The location of the property could improve their options for a mortgage. For example, if the property is located in a rural area, they could qualify for a USDA loan since the program caters to buyers who want properties in non-metro areas. However, if they do not want a property in a rural area, they cannot use the program to get a home. The buyer will need to get an FHA or a conventional mortgage to buy their home.
What Mortgage Meets Their Needs?
The buyer reviews the restrictions and benefits of each mortgage program. For example, they cannot buy a second or vacation home if the buyer wants to use an FHA mortgage. They will have to get a conventional loan. If they want to use a VA mortgage, the buyer must find a home that qualifies under the most recent VA guidelines. By learning more about the restrictions, the buyer avoids delays and gets their mortgage faster.
A Review of Additional Costs
Common costs related to buying a home include down payments, closing costs, insurance premiums, and title insurance. When reviewing each of these costs, the buyer must consider if they have enough money to cover the additional expenses. For instance, they cannot close the property without getting homeowner’s insurance first. It is recommended that they calculate these costs when saving up money for a new home.
Buyers must evaluate the essential steps for buying their first home. It is a great way to avoid mistakes that could prove costly later. The buyers will need to get great credit scores to get better loans with lower interest rates. Buyers can learn more about buying their first home by contacting a lender now.
