Owning your first home is an attainable goal
Purchasing a home is even more attainable through mortgage programs specifically geared toward first-time homebuyers. The process of buying your first home may seem confusing so that’s why it’s important to speak with a real estate agent. They will also be looking out for you to negotiate the best price once you are ready to purchase a home.
Before you start looking for a home, you will need to know how much you can afford, and the best way to do that is to get pre-approved for your loan. Check with specific lenders and look at interest rates so you get the best possible terms.
A mortgage is likely the largest loan that you’ll ever take out during your lifetime, so it’s important to work with a lender that has your best interest in mind. I work with a variety of lenders that can get you preapproved to purchase your new home.
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Renting vs. Buying
There are pros and cons to renting versus buying. A higher percentage of U.S. households are renting. However, for other aspiring homebuyers, working with a savvy real estate agent and lender can help them realize they’re ready to take the plunge.
Some of the advantages to homeownership are:
- Creates long term wealth accumulation
- Tax advantages
- Rental investment income possibility
- A greater feeling of security and stability
- Interest rates are low
- It may be cheaper to buy than pay high monthly rental rates
- Real estate as an asset has performed better than any other asset type in the last 30 years (if you consider tax write-offs, price appreciation, and rental income, it outperforms by far)
Different Loans
I work with a variety of lenders to help you start the process of looking for a home. The lender will determine what you can afford to buy based on several factors. You will need to bring certain important documents when you meet with the lender.
- Last two years of income taxes
- Two recent paystubs
- Two recent bank statements
- Government issued ID and Social Security Card
FHA
A lot of first-time buyers can qualify for an FHA [Federal Housing Administration] loan that allows you to buy a home with as little as 3.5% down, depending on your credit score and other factors.
Conventional
Conventional loans are the best suited for borrowers with good credit. Most conventional mortgages will require a minimum credit score of 620-640. Having a higher credit score is even better. If your score is on the lower end, or below the minimum score required then an FHA loan may be a better option for you.
VA
VA Home Loans do not require down payment or private mortgage insurance, and loans are guaranteed in California to amounts in excess of $1 million. These loans are for veterans.
