First-Time Homebuyer? Everything You Need to Know About Getting a Mortgage

First-Time Homebuyer? Everything You Need to Know About Getting a Mortgage

Buying your first home can be both exciting and frightening at the same time as you’re making a long-lasting financial decision. It’s a significant event, which is why it’s essential to know everything about getting a mortgage. Knowing all the options available to you — whether it comes to the mortgage lender or mortgage — will allow you to make the right decision.

This article will discuss everything you need to know about getting a mortgage.

What is a first-time homebuyer?

In traditional terms, a first-time homebuyer hasn’t owned a home before. However, the definition tends to be broader than expected. You can qualify as a first-time homebuyer even if you’ve been a homebuyer in the past as long as you haven’t owned or purchased a home in the last three years.

Homebuyers purchasing for the first time are generally eligible for specific programs and discounts, which can make home-buying more affordable. For example, an FHA loan is designed to help first-time homebuyers and requires as little as a 3.5% down payment.

Tips for getting a mortgage as a first-time homebuyer

Here are some suggestions for getting a mortgage as a first-time homebuyer:

1. Review your finances.

When applying for a mortgage, you’ll want to have your finances in order. Mortgage lenders want to have confidence when they back your mortgage, which is why they want to see that you have good credit. That’s why you should prioritze paying down high-interest debt before you prepare to buy a house.

In general, mortgage lenders will want to know every detail about your financial life. You’ll have to show proof of income so they know you can afford to make monthly mortgage payments. They’ll also confirm your debt-to-income ratio, which is the amount you pay toward all your debt each month divided by your monthly income. This includes things like student loans, auto loans, credit card debt, and any other obligations you’re making payments on.

2. Determine how much of a down payment you can afford.

One of the most significant reasons to pay off debt before buying a home is that it can free up the money you were putting toward credit card and loan payments. A 20% down payment or more can help you secure a lower interest rate, making you an attractive candidate to mortgage lenders.

Another reason to pay more upfront if you can is because lenders will require you to purchase private mortgage insurance with a lower down payment, which will be tacked onto your monthly payments.

3. Know your home loan options.

Knowing all the mortgage types can help you find the best home loan program for your financial situation. While the most standard type of home loan is a 30-year fixed mortgage, the right loan will vary depending on your circumstances.

Here are some of the most common home loan types:

  • FHA loans
  • VA loans
  • USDA loans
  • Fannie Mae conventional
  • Freddie Mac home possible
  • Fannie Mae HomeReady mortgage
  • Good Neighbor Next Door
  • Energy Efficient Mortgage

Reach out to Mortgages by Jill for an experienced loan officer.

If you are a first-time home buyer in Greensboro, you’ll find an experienced and passionate loan officer at Mortgages by Jill. Our team can help you find mortgage options that best fit your needs and plans, including FHA loans and other programs for first-time home buyers.

If you want to purchase a home in Greensboro or the surrounding areas, contact us today to see what mortgage options are available to help you realize your home ownership dreams.

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