Home Loan Process: Loans for First Time Home Buyers
- posted 5.11.2015
- Nicole Johnson
- Home Loans
Loans for First Time Home Buyers
Are you planning to purchase a new home in the next few months? You shouldn't feel overwhelmed: You can start the home financing process now in only a few simple steps.
Consulting a loan specialist will prepare you for purchasing a home whether you're looking for a first time home buyer loan program, a loan to move or upgrade your current home, need a vacation home mortgage or investment property loan, or want to secure your retirement with a reverse mortgage.
Get a Preapproval
Getting a preapproval shows Real Estate Agents and sellers that your offer is serious. In today's real estate market, making a competitive offer that is backed by an underwritten preapproval will give you an edge over other, unprepared buyers.
To start the preapproval process, proof of your financial standing is required. Documents typically required include, but are not limited to:
- Proof of Income: Original pay stubs for the last 30 days.
- Copy of Homeowners Insurance: Verifies that you currently do and will have sufficient coverage on the home.
- Copies of Your W-2 Forms: Verifies employment and income history, and should include the last two years for each applicant.
- Copies of asset information: Include any accounts that may provide funds for closing - savings, checking and 401k accounts, as well as investment records for any mutual funds or stocks.
- Copy of Title Insurance: Verifies the legal description of your property, the taxes, and the names on the title.
Choose Your Loan
When purchasing a new home, there are many types of mortgages to choose from, including conventional loans, VA Home Loans, FHA Loans or Jumbo Mortgage. Work with a knowledgeable lender to find an optimal, affordable loan option.
30 Year Fixed Rate Mortgage – Offers steady monthly payments over a 30 year term, more affordable payments as compared to mortgages with shorter terms.
15 Year Fixed Rate Mortgage – Lets you pay off your home loan faster and reduce your interest payments over the life of the loan.
VA Loan – Offers long-term financing to eligible American veterans, and is guaranteed by the U.S. Department of Veterans Affairs (VA). It can be obtained without a down payment and doesn’t require private mortgage insurance.
FHA Loan – Insured by the Federal Housing Administration (FHA), this loan gives the flexibility of buying a home with a lower down payment and credit score.
Conventional Loan – Features down payments as low as 3%. These loans have fewer restrictions than government-guaranteed loans and offer more flexible terms and program benefits.
Adjustable Rate Mortgage – A loan with a variable interest rate. There is an initial period where the rate is fixed, after which, the interest rate adjusts according to the market and loan terms.
Jumbo Loan – Exceeds the loan limit set by Freddie Mac and Fannie Mae. Typically, in most counties the Jumbo Loan limit is $453,100 but in some areas due to higher home prices, that limit is $679,650.
Home Improvement – Can be used for home renovation or to buy a fixer-upper.
Interest-Only Loan – A borrower has the option to only make monthly interest payments due on a mortgage for a preset term, which is usually between 5 to 7 years.
I CAN Mortgage – This loan allows you to customize your loan term from 8 to 30 years.
USDA Loan – No down payments required and credit qualification is more flexible than other loan types
Find Your Dream Home
After you have been approved and have chosen the best loan terms for your lifestyle, house hunting and choosing your dream home are so much easier. You now know how much you can afford and how it will impact you in the years to come.
Your preapproval is active for two months, allowing you time to find the perfect home. With a preapproval, you are a virtual cash buyer, basically shopping with money in your pocket.
Fast, On-Time Closings
If you've already provided the necessary paperwork, have been approved for a loan and found the home of your dreams, the next step is arranging a closing date. As an all-inclusive mortgage banker with our own in-house underwriting and funding teams, we work as a cohesive team to close loans fast. This fast and hassle free service is not only an incentive to you, but also to Real Estate Agents and sellers who need to close quickly. Once you have finalized the closing, you are ready to move into your new home.