Decoding the Mortgage: A First-time Buyer’s Success Guide

Congratulations, you’ve finally decided to take the plunge into the pool of eager first-time homeowners! It’s been months as paint swatches & end tables danced in your head, and now you’re ready (we hope), to take the next step. Deciding to purchase your first home can quickly escalate from exciting to overwhelming when it comes to understanding a mortgage and as lenders, we’re here to help!

We want to make sure that you, the buyer, are up-to-speed on everything from qualifications, applications, interest rates, and payment methods. The more educated & prepared you are, the more time you’ll have to focus on finding your dream-home.

Know Your Needs: Before you leave the renters world, it is important to make sure that you are ready for all of the responsibilities that follow. Whether you are making this investment alone, or with another party, it is encouraged to discuss your expectations and limits. Carefully consider the following questions before you meet with a loan officer. This will help give a clear insight to what will best fit your buyer needs.

• What is my credit score?
• Do I have a reliable income/am I financially stable?
• Will I have the ability to provide a down payment and how much?
• Have I considered other home expenses?

What came first: The loan or the home? It is common that new buyers may not know which step to take first in order to move forward. A pre-qualification process should take place first to determine your eligibility and the amount you should quality for. Knowing that you qualify along with the qualifying amount before you go house hunting shows the Real Estate Agent you are a serious shopper.   

Get Organized:

Here are some of the documents that may be requested when applying for your mortgage:

• Borrower income for last two years
• Asset account statements
• Credit report – Lender will run
• Pay-stubs
• W-2 Forms

Know your lender AND your loan: It’s easy for first-time buyers to get confused when discussing the details regarding their mortgage loans. Talk with your lender and don’t be afraid to ask questions! Do your lender research and take advantage of their online resources. Brushing up on what programs they offer, FAQ’s, and their glossary of terms will help you to understand the in and out of a mortgage.

Here is just a sneak peak of what will be covered when choosing a mortgage loan:

• Will you have a fixed interest or an adjustable rate?
• What is the lowest possible interest rate for you?
• How many years do you have to pay back?
• What will a monthly payment estimate to?
• First Time Home Buyer Programs?

Buying your first home is big great decision, and even has its advantages to renting. By purchasing a home you will build equity, receive tax deductions, and will have full control over all decisions regarding your new space! Plus, that neighborhood BBQ doesn’t sound too bad either.

If you are still feeling a little apprehensive, use this checklist as a guideline for your mortgage success. Happy hunting!

1. I have made sure I am financially comfortable to begin the purchase process.
2. I have collected all necessary documentation requested from my loan officer.
3. I have received a pre-approval letter & have completed mortgage application.
4. I have found a realtor & discussed my desired price range, location, and interests.