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Buying Your First Home

Buying your first home can be an exciting and overwhelming experience. There are many things to consider, such as the type of loan you want, the down payment amount, and closing costs. 

That’s why it’s important to work with an experienced mortgage team that can provide customized financing and guide you through the process every step of the way. We offer a variety of traditional purchase loan options, including conventional, FHA and VA loans, so you can find the perfect loan for your needs. 

Let us help you become a first-time homeowner today.

What Are Your Purchase Loan Options?

Purchasing your first home is an exciting accomplishment and a major investment. Understanding your financing options is important to ensure you choose the loan option that best fits your first-time homebuying needs.

Here’s a quick overview of the three most popular types of loans available to first-time buyers.

Conventional Loan

A conventional loan is a mortgage that is not backed by the government. It typically offers low-interest rates and terms and can be a great choice for homebuyers who have good credit, low debt, and a steady income.

FHA Loan

An FHA loan is a mortgage that is insured by the Federal Housing Administration. These loans are available to first-time homebuyers with low down payments and credit scores.

VA Loan

A VA loan is a mortgage that is guaranteed by the Department of Veterans Affairs. These loans are available to eligible veterans and their spouses with no down payment required.

How to Get a Purchase Loan

If you’re ready to start the process of getting a purchase loan, the first step is to contact an experienced mortgage team. We can help you understand your loan options and find the perfect financing for your needs.

The Financing Process

If you’re a first-time homebuyer, the financing process can be daunting. But with the help of an experienced mortgage team, you can get the loan you need to purchase your first home. 

We’ll first need to pull your credit report and assess your financial situation. From there, we’ll work with you to choose the best loan option for your needs. We’ll also help you understand the various fees associated with getting a loan, such as the down payment, closing costs, and origination fee.

. Getting pre-approved for a loan can help you make a more competitive offer on a home that you love and can afford. Once you’ve found the perfect home, we’ll work with you to close on the loan so that you can move forward and move in.

Speak with our mortgage lending team to learn more about our first-time homebuyer programs and loan types including conventional, FHA, VA and more.

Purchase Loan Requirements to Meet

These are the common requirements often needed to qualify for a purchase loan. If you have questions about these requirements, we’re here to help.

  • In most cases, it’s best to have a credit score of 620 or higher. This requirement can be lower or higher based on various loan programs and the details of your financial situation.
  • Through underwriting evaluation, you’ll need documentation of consistent income with a Debt-to-Income ratio at or below 50% in most cases. This ratio shows how much of your monthly income goes to paying your debt and the requirement varies based on the loan program.
  • Along with income information you need to share employment verification and history. You’ll also need to show proof of your debts and assets. 
  • You’ll also need to show you have funds available for a down payment. The amount you’ll need will depend on the type of loan you choose. The number can range from 3.5% for an FHA loan to up to 20% for a conventional loan.

First-Time Homebuyer FAQs

Many questions arise while you’re considering buying a home for the first time. We’ve answered the most common ones to guide you. Our mortgage lending team is always here to answer any other questions you have.

How do I figure out how much I can afford to spend on a house?

Our team can help you understand your financial situation and what you can qualify for when searching for your first home. Once we assess your financial situation, we can determine how much home you can afford. 

When deciding on purchasing your first home, consider ongoing costs you’ll need to cover such as your monthly mortgage payment, in addition to property taxes, homeowners insurance, and maintenance expenses. 

Knowing what interest rate you qualify for, your down payment amount, and the term length of your loan will help you understand how much you can afford with your current income and expenses.

How much do I need for a down payment?

Your down payment amount affects the affordability of your mortgage, so it helps to consider how much you’ve saved, how much you want to invest in the home upfront, and how it will impact your loan.

The minimum down payment for many first-time homebuyers is around 3% of the value of the home. A larger down payment can reduce additional loan expenses such as mortgage insurance. For example, a 20% down payment with a conventional loan will eliminate Private Mortgage Insurance (PMI) costs. A higher down payment can also lower the amount of your loan and increase your immediate equity in your home.

What is private mortgage insurance?

Private mortgage insurance (PMI) is insurance that protects the lender in case you default on your loan. It’s typically required for a conventional loan if you have a down payment of less than 20% on your home and is an added cost to your monthly mortgage payment.

For FHA loans you may need to pay a monthly Mortgage Insurance Premium (MIP) as well as an upfront cost to cover risks for the lender as they offer more flexible qualification requirements. MIP requirements vary but it’s commonly required for FHA loans with a down payment of less than 10%.

With both of these, it’s possible to eliminate mortgage insurance as you continue to pay down your mortgage.

How much are closing costs?

Closing costs are the fees associated with getting a loan, such as the down payment, origination fee, and title insurance. These fees can vary depending on the type of loan you choose. 

Understanding these costs early on can help you prepare to cover the expenses of getting a mortgage, in addition to paying your down payment on your new home.

Closing costs differ based on your loan type. For example, closing costs for a conventional loan can typically range from 2-4% of your loan amount. Whereas closing costs for an FHA loan can range from 1-3%.

Some loan programs also offer no-closing-cost options.

What is the difference between an FHA loan and a conventional loan?

Both are great options for buying your first home. They both offer flexible down payment options with varying down payment amounts. Choosing the right one for you depends on many factors.

If you have a higher credit score and can make a larger down payment, a conventional loan will likely offer a lower interest rate and more affordable mortgage insurance options, resulting in a lower monthly mortgage payment.

Those with lower credit scores may benefit from an FHA loan, as they provide more flexible lending options with lower down payment requirements while still providing competitive interest rates and options for low down payments.