It's no secret that mortgage rates are at all-time lows, making it an excellent time to secure a first time mortgage. You’ve read it all over headlines and have heard about the abundance of new foreclosures. Unfortunately, tough times have hit hard, resulting in a national epidemic of low credit scores, bankruptcies, foreclosures and short sales. Many first time home buyers don’t think they can qualify for a home loan, but the truth is, there are many types of mortgages available, even for first time home buyers. Even if you are facing some of these challenges, we can help you determine if now is the time to buy your first home and which first-time home buying loan program is right for you. Get your New American Mortgage today.
Preparing for a Home Loan | Shopping for a Home | Closing Your Mortgage
Helpful Forms & Worksheets
Preparing for a Home Loan
Your Financial Situation
One of the best things you can do, to help yourself prepare for what’s to come in the home buying process, is to check your credit rating with the 3 credit bureaus: Equifax, Experian, and TransUnion. Clear up any errors that may appear on those reports as soon as possible. You should also consider consolidating any debt you may have. The goal is to have your total debt less than 38% of your total income. Your credit score plays an important factor in determining how much you are qualified to borrow, so make sure you do your homework and find out where you stand.
Saving money is also a top priority for new home buyers. Saving as much as possible prior to beginning the home buying process will ensure a substantial down payment and the potential to lower your rate and monthly payment.
Less than Perfect Credit?
Good credit is ideal, but we all know that unfortunately in this market many of us don’t fall into that category. The good news is that we do offer many types of mortgages to those with not-so-perfect credit, and chances are you may still be able to qualify for home financing.
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Before you even look to buy a house, your first step should be to get credit approved. The credit approval will give you the confidence to look for a new home, know how much you qualify to borrow, and better understand your different home financing options. Having a credit approval prior to putting an offer a home will also give you an advantage over competing offers. Our loan officers will work with you to gather the needed information to get preapproved for a home loan. Be ready to provide documentation for all of your finances, including: proof of income (paystubs), copies of W-2s, and copies of asset information.
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Choose the Right Loan Officer
Finding and choosing a qualified and competent loan officer is important, especially for a first time mortgage. This should be included in the first step of getting preapproved (if you are working with a good loan officer, they will help you get preapproved). The loan officer will help you determine what home financing loan option is the most beneficial for your home needs and lifestyle. Whomever you choose to work with will come to know a lot about you, and will be involved in one of the biggest decisions you will ever make. It’s important that they are trustworthy, make themselves available to answer your questions, and are knowledgeable on all the different loan products available.
At New American Funding, our loan officers will help you prepare so you feel confident about your decision to buy a new home. We will educate you on the different types of mortgages available, teach you how to get a mortgage and help you get preapproved for your home loan, relieving any fears about the process and making sure that you are 100% comfortable with your home loan.
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Shopping for a Home
Working with Your Realtor
A real estate agent is someone that will be with you from start to finish. They’ll be responsible for finding you the perfect home, negotiating to get you the best deal, and handling all the tedious paperwork that’s involved with buying a home. They are a wealth of knowledge and insight, not only in real estate, but also in the communities where they work. They know all the great spots in town and what neighborhood best suits your needs.
Finding a good Realtor is not something that should be taken lightly. Ask friends and family for recommendations, and always interview candidates before choosing the right one for you. New American Funding can also recommend a real estate agent to you as we work with our network of Preferred Realtors. All of these real estate agents have the knowledge, insight, and experience needed to help you find your dream home. Just ask and we’ll recommend!
How to Choose What is Best for You
Your real estate agent can help you find the best house in the best neighborhood, but first you must understand what you and your family need in a new home. It’s time to make a checklist of things you’re looking for in a house: How many bedrooms? How long of a commute can you tolerate? Do you want it in the suburbs or near downtown? The more details you provide, the easier it will be for your agent to find something that accommodates your lifestyle.
Costs Associated with Your Purchase
Buying a new home requires a few different types of up-front costs. Be prepared for what you will spend on a new home by understanding why and when you’ll need to have cash ready:
- Earnest Money– Money you put up front to show that you’re serious about purchasing.
- Down Payment– Money that’s paid toward the total of the home’s price, usually 10-20%, but you can get it as low as 3% if you qualify for certain types of mortgages.
- Closing Cost – Expenses associated with a home loan, such as processing fees charged by the lender, Title Company, the local government, and anyone else involved with the home sale. We are required to provide you with a “Good Faith Estimate” (GFE) which gives you an estimate of all the closing cost fees ahead of time.
Closing on your Mortgage
Almost all home loans require a down payment somewhere between 10% and 20% of the home’s purchase price. This is typically the largest cost of the whole home purchase, especially for buyers looking for a first time mortgage. Providing this much cash is an effort that must be taken seriously, and you need to start saving if you’re going to buy the home you want.
Some programs are available that allow as little as a 3% down payment. Working with New American Funding will show you all of your options – from FHA Home Loans and VA Loans to Fixed Rate Mortgages and Adjustable Rate Mortgages.
Gift monies can also be used to purchase a home. If you are planning a wedding, it is not uncommon to find wedding registries include cash gifts to help a couple plan for a home purchase.
Fast, on-time closings
Once you have prepared yourself for home ownership, have selected a new home, and have secured an offer, the final step is closing the deal. Since we work with you from start until finish, we can guarantee a fast, on-time closing time once your offer has been accepted.