So, you’ve decided to become a homeowner? Congratulations! We’re excited for you! That means no more dealing with a landlord or the unexpected price increases to your rent.
That also means that you need to prepare to purchase your first home.
We know that the homebuying process can be quite daunting, but that’s why we’re here. At Security First Financial, we’ve helped thousands of satisfied customers with the homebuying process since we started in 2009.
We hope this condensed guide will help answer some of your questions and get you on your way to your new home. If you still have questions, please feel free to CONTACT US.
Check Your Credit *
First and foremost, you’ve got to have a good idea of what your credit score is and if there are any ways to improve your score before you apply for a loan. Your credit is one of, if not the biggest factor in determining the type of loan you qualify for and will also determine your interest rate. There are multiple free credit services online you can take advantage of to check your score. Once you do, thoroughly check your credit report to make sure there aren’t any errors.
Stop Credit Activity
Now is not a good time to apply for more credit cards, take out any other kind of loans such as a car loan, or make any major purchases using credit. Simply use your credit cards as you normally would so you don’t create any red flags for your loan originator.
Assets and Liabilities
Another important part of the loan process is knowing how your money is flowing in and out of your bank account. Your mortgage lender will want to see how much money and how often money is going in and out of your account, so be ready to provide that information.
You’ll be asked for a lot of paperwork during the loan process to verify your income, employment, assets and debts. Being organized and ready with these documents will make the process much quicker and a lot less stressful. More information on the specific documents you’ll need can be found here: Documents You Need for a Mortgage.
Explore Down Payment Options
There’s a myth that’s been floating around for years that you need a 20% down payment to buy a house. That’s simply not the case, especially for first-time homebuyers. There are various first-time homebuyer programs, including federal mortgage programs with Fannie Mae and Freddie Mac that allow loans with only 3.0% down, plus Federal Housing Administration (FHA) loans as low as 3.5% down and qualified Veteran and USDA (Rural Housing) loans for 0% down! In the state of Colorado there are also Down Payment Assistance programs through the Colorado Housing and Finance Authority (CHFA) that can help you with your down payment and closing costs. Click here for more information on Down Payment Assistance or watch this video featuring our very own Branch Manager and Loan Originator, Nick Barta:
Research Mortgage Lenders
We would love it if you decide to work with us, but we also understand that there are other mortgage companies and lenders out there that offer different experiences. Utilize your Rolodex (is that still a thing?) and ask your friends, family and colleagues for their recommendations.
We have to throw our hat in the ring though, so please read the REVIEWS we’ve received from past customers.
Applying for a loan is quite simple. Just check out our SHORT APPLICATION. Once you’ve applied online you’ll be able to talk with a loan originator about your mortgage options and they’ll also be able to recommend the types of loans that will best fit your needs. Since getting pre-qualified is only determined by the information you provide, the loan amount being offered isn’t guaranteed (only an amount you might be approved for by the lender) and doesn’t hold the same weight as being pre-approved when searching for homes. Getting pre-approved is the next step which involves a more thorough look into your financial background and credit rating.
We hope you found this guide helpful! Please feel free to CONTACT US if you have further questions regarding the home buying process or if you’re ready to get started with your home loan!
* Authorized by the Federal Trade Commission and the Consumer Financial Protection Bureau, consumers can receive their annual credit report through www.annualcreditreport.com