As a first-time homebuyer, there are many loan assistance opportunities that you have access to. Many programs exist to help make your dream home come to life. But what if this is not your first attempt to purchase a home? Are you still qualified to resort to these first-time homebuyers loan assistance? This article will answer these and other questions in the buying of your first house.
Who Qualifies as a First-Time Homebuyer?
It is important to first define who qualifies as a first-time homebuyer. Of course, this automatically includes those attempting to look and buy a home for the first time.
People who attempted to buy a house before but could not provide a down payment through first-time homebuyer grants and loan programs are still considered first-time homebuyers and can try again.
In most cases, anyone who has not purchased or owned a home for at least three years is considered a first-time homebuyer again. Confirm if the lender you are eyeing also has the same qualifications. Therefore, experienced or not, anyone can take advantage of these loan assistance programs.
What about the Down Payment?
The general downpayment for every loan applicant is at least 20 percent of the house’s current value. That amount could be too much for most buyers. Luckily, through the help of loan assistance programs for first-time buyers, you can get the following perks:
- The FHA (Federal Housing Administration) Loan only requires a 3.5 percent down payment from the borrower.
- If you choose the conventional loans backed by Fannie Mae and Freddie Mac, they will ask you for a 3 percent down payment.
- If you get approved for the USDA or VA home loan programs, they would not require you to pay any down payment at all.
How About the Credit Score?
Another big concern of borrowers besides the down payment amount is the credit score. This score plays a vital role in whether your application for the loan will be approved or not. The higher your credit score is, the better the terms you could get. Meanwhile, those who have low scores could get rejected.
All these still depend on how the lender can define their loan terms, but usually, if you have a credit score of 500 or 620, you can still apply for a loan program from FHA and conventional loans, respectively.
Before you panic, do your research well and ask concerned parties directly.
What Should You Do Next?
If you are now confident about having your home soon, here are the things that should be included in your next steps
Step 1: Examine your financial situation
Here is when you must check whether your credit score fits the requirements of your loan provider. Also, check how large a down payment you can provide. Knowing your budget ahead could help you negotiate better terms and prevent you from saying yes to all offers.
Step 2: Secure mortgage quotes
Start looking for a mortgage lender and aim to have at least three quotations. That way, you would have points for comparison, and you might find which one is best for you.
Step 3: Get preapproved for your mortgage
Once you find the lender that is best for you, consider applying for pre-approval. That way, you might find out how much you are qualified to borrow. It would help you limit the houses you should be looking for.
Step 4: Find a real estate agent and start looking for your home
Once you determine your budget and receive pre-approval, it is time to find someone to help you look for your home.
Buying a home for the first time can be intimidating, especially for first-time homebuyers. However, keep in mind that the majority of lenders are always willing to assist you. You only need to know where and how to start, and you would find yourself on your way to your new home.
Ready to get that property? Let us take care of your mortgage application or FHA loan in Sacramento, CA. Hawkins Home Loans, Inc. is your online resource for a stress-free process, incredibly low rates, and amazing service. Schedule an appointment with us today.