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Home Purchase-Where to begin

Posted on October 1, 2015 by Ray Williams (NMLS #216267).

Purchasing a home for the first time is an exciting yet confusing, overwhelming and can be an intensive process. So where do you start? Well, you can’t purchase without funds, correct? The first place to start is searching for a lender. There are so many outlets to look at online that at some point it becomes too much.  As you start your research, gather all the information, start a list with questions you have.  Then start searching for a lender.   Remember, you need to look beyond the interest rate.  As a first time home buyer you need guidance, education and support throughout the process.  You need to start with at least knowing your credit score (FICO) and having some money in the bank. You may find programs that will offer low credit scores and/or no money down. BEWARE!  Please keep in mind that if it sounds too good to be true, then it probably is.  Now, that being said yes there are programs available for lower credit scores and programs with down payment assistance; if those are items you need to search for then you need to look for lenders who can provide.  Those should be the first questions you ask the lender prior to completing a loan application and running your credit.

You should also know the key differences between FHA & Conventional.  Just because you don’t have 20% down doesn’t necessarily mean you can’t do a Conventional loan. You can put 3% down on a Conventional loan, it’s just knowing if that option is available to you BUT is it the best option for you.  This is where an experienced lender can show you the difference in the two and how each affect the monthly mortgage payment and purchase price.

If you know you are wanting to look for a home in a more rural area then you need to find out information on a USDA loan.  You will need to ask the lender if they are experienced and can offer USDA loans.  Again, you will want to check with the lender prior to completing a loan application and running your credit.

Are you thinking about purchasing a home that might need a little TLC? Or maybe you’re thinking it might be a better option to find a bank owned home (foreclosure).  If so then you should consider a rehab loan.  There is an FHA 203k and Conventional rehab loan option.  This is where you add the renovation costs into your mortgage.  If this is even the slightest bit of interest to you then you need to make sure to ask your lender if they can provide these types of loans.

In conclusion, while you are doing your research make a list of what you are thinking you would be interested in, call lenders, ask questions and then when you feel comfortable make an appointment and meet them. The next step is getting pre-approved. Make sure you know the difference between pre-approved and pre-qualified.  *Don’t make an offer on a home if a lender has not looked at your financials!

For more information and if you have any questions please contact us.  If you would like to set up a consultation, give us a call.

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