Marquee Madness: First time homebuyer tips
Looking to purchase your very first home?
Please continue reading and you’ll find some basic mortgage tips to help first time buyers qualify
Being a First-Time homebuyer can come with a lot of stresses. It can be challenging and nerve-wrecking, especially for those starting out young. We have provided some essential tips for navigating the mortgage process as you get ready to purchase your new home.
3 Mortgage qualifying Basics:
Credit scores are King! Everyone knows the higher your credit score, the lower your interest rate and borrowing cost. Here are some simple tips on how to improve your credit score:
-Pay your credit card balances down below 20% of your maximum credit line
-DO NOT make payments on collection or charged off debt of any kind without consulting your loan officer first
-Strategically opening new debt can boost credit scores quickly but needs to be discussed with an experienced loan officer first
-Every type of loan has different maximum debt to income ratio requirements that must be met. As an example, an FHA loan allows for a higher debt ratio than that of a conventional loan
-Debt to income ratios are always calculated off of gross, NOT net income
-Over time, bonus and commission income must have a 2 year history in order to be used in qualifying
-Non occupant co-signers can be used in most cases to help offset income challenges of the buyer
3. Down payment
-Unless you are a veteran, the minimum down payment for first time buyers will be 3%
-Gift funds are allowed on virtually all loans for first time buyers and the sourcing requirement of these funds has been lessened recently
-In some cases, money needed for down payment can be borrowed but these circumstances will need to be discussed with a loan officer early in the mortgage process.
In conclusion, working with an experienced and reputable loan officer is the essential key into making your first home purchase successful. Reaching out early to a mortgage professional who has expertise in structuring loans correctly, will be the most beneficial to all buyers.
*Marquee Mortgage LLC, is an independent, full service broker specializing in purchase money loans, refinances and creative lending solutions.