When it comes to buying a new home, people want the best of the best. But if you are buying a home for the first time, how can you get the home of your dreams with the tight budget you have? What are the steps to getting that first home, or the requirements for that matter? This simple step-by-step guide will give you some insight on what to expect as a Fairfax resident during a first time home buyer loan program.
Obviously people that have never really had a home before qualify as a first time home buyer. You might be thinking that this is the only way to qualify as a first time home buyer. But there are other ways to qualify than simply never owning a home before.
People who have not owned their own house for three years, either you or your spouse, can qualify. Another way to qualify is if you are a single parent who only owned with a former spouse while married. You can also qualify by being a displaced house manager who only owned with a spouse, someone who has only owned a residence that does not have a permanent foundation, and someone who has only owned property that is not in compliance with state, local, or model building codes and cannot be brought into compliance for less than the cost of constructing a permanent structure.
As you can see, there are a variety of different ways that allow you to qualify as a first time home buyer. All these different ways give a wider range of people to allow to buy a home for the first time and get the loans and the right price for the house they need. Once you have figured out if you qualify, it is time to consider money issues.
The most important part of buying a house for the first time is how much money can you put into it. What is the absolute maximum you can spend on when buying a house? What kind of house are you looking for in the first place that doesn’t exceed the amount you want to pay for? Do you want to get a first time home buyer loan? How much mortgage do you qualify for? These are just a few questions you might ask when considering buying a home for the first time.
Your credit score is also important. Generally, a good credit score means that you will be able to get a first time home buyer loan while a bad credit score might shut you out from that type of deal. Debts are also another important thing to consider. How much money do you owe in the first place? If you are unable to pay off the debt, then you might not be able to get a first time home buyer loan. Make sure to check if you have any serious debts to take care of first and a good credit score before buying a home.
Funding Your Search
Now comes the fun part of finding the right type of loan you want to get when buying a home for the first time. First time home buyers can, obviously, qualify for a first time home buying loan if their credit score is good and they don’t have any pre-existing debts. But what other loan options are there to consider? Here are a few to keep in mind when buying your first home.
One important kind of loan is the FHA loan. Federal Housing Administration, or FHA, loans are insured by the government and have easier qualifications compared to other loans, especially if your credit score isn’t that good. They also offer lower down payments to those with a debt-to-income ratio of about 50%. This type of loan is popular among first time home buyers and should be considered when getting a loan.
Another possible loan to get is the VA loan. The Veteran’s Administration loan, or VA loan, allows those in the military, veterans, and surviving spouses to not pay down payment at competitive interest rates. You also don’t need to buy private mortgage insurance for these loans. It is another option to consider if you are eligible for this type of loan.
Then there are conventional loans. Conventional loans are fixed-rate mortgages that are not insured by the federal government. It is much, much harder to get this kind of loan in the beginning because of the requirements for credit score, down payment, and income you have. However, this is another option to consider if you are able to qualify for it.
These are just a few of the loans you can take if you want to fund your search for the perfect home. There many different types of loans out there, so don’t just narrow your choices down to these three types of loans, although they are good to think about. After getting a loan, or not, it is time to go house shopping.
Finding the Perfect Home (and Realtor)
Once you have figured out how to fund for your house buying and if you have enough money to begin with, it is time to buy a house. But before that, consider getting a real estate agent or a mortgage broker. Real estate agents know the kinds of homes that are available and can guide you through the home buying process. Mortgage brokers can also guide you through the home buying process, but they also know the ins and outs of the housing market and can help you pick the right house with the right mortgage. They can also help you with your paperwork when finding a realtor.
Once you’ve considered those options and, possibly, choose a real estate agent or a mortgage broker, then you search for the house. There are a few websites dedicated to showing houses to choose from, as well as websites that can show what type of realtor there is. Find the right realtor you can negotiate with first before finding the house, as these are the people you’ll have to talk with when you first buy your house. When you find a realtor and a house they are selling, meet up with them and discuss the pricing of the house you want to buy. You may end up discussing how to lower the price, but in the end you’ll get the deal that you want.
Is it Right for You?
Now that you have found the right home and haggled with the realtor on the pricing, ask yourself this: is this the right home after all? The best way to find out is to do a home inspection to see if there is any problems with the home. Check to see if it has any structural damage or anything that needs fixing. Don’t be superficial and turn your nose at it just because it looks ugly on the inside, as you can always fix those later down the line once you have more money.
Once you are satisfied with your choice, close the deal and fill out the paperwork. Congratulations! You just got yourself your first home! While there are other things to think about once you get the new home, you can take a moment to enjoy the fact that you have your very own home for the first time before doing anything else.