Buying a house for the first time can be a daunting task if you don't have someone to help guide you through the process. That is why choosing a local mortgage loan originator is so important. Even though I am a loan originator in Huntsville, AL and Fayetteville, TN and I service all of Alabama and Tennessee.
Your first step to buying a home is to find out how much home that you can afford. You can do that by applying with a lender to get preapproved. Your lender will look at your income, assets and credit history to help you determine how much home that you can afford.
Once you are preapproved, it is time to find a home. I can help you with finding a realtor, I have a network of realtors that I have worked with for many years and they will guide you through the buying process.
Where to Start
1. Get preapproved, This is where you submit a loan application and have your credit pulled, your income and your assets listed and this is where your loan officer will take your financial profile and help you with how much house that you can afford.
2. Once you have been preapproved and have a good idea of how much home that you can afford, then it is time to find a realtor to help you find a home!
3. After you find a home, it is time to start your loan. Once you have a contract in hand, you need to call your loan officer and let him guide you from there.
Important Considerations:
Homebuyer Education: Most first-time homebuyer programs require completing a homebuyer education course.
Income Limits: Many assistance programs have income restrictions, so check the specific program requirements.
Credit Score: While some programs have more flexible credit requirements, generally, a higher credit score will improve your chances of qualifying.
Lender: You need a lender like SouthState Bank and Tim Byrne to help you navigate the buying process.
PMI - Private Mortgage Insurance is insurance that protects the lender in the event that you default on your loan and is required if you put less than 20% down payment on your home.
Fixed Interest Rate - The interest rate is fixed for the life of the loan.
ARM - Adjustable Rate Mortgage. These loans typically have a lower interest rate, but the interest rate is only fixed for a certain amount of time. For Instance, a 7/1 Arm is fixed for 7 years and can adjust each year after that for a cap. It is important that you fully understand this loan product.
Common Questions.
How much do I need to put down on a home?
Many first time homebuyer loans offer from 0% down to 3.5% down. If you live in Alabama, I can help you secure 0% down on your first home.
Is my credit score good enough?
Credit scores range from 300 to a high of 850. The minimum score for a first time home buyer is 600 for an FHA loan at 3.5% down. If you have a 640 or higher, I can help you secure 100% financing.
What happens if you pull my credit and it isn't good enough to get pre-approved?
In that case, I can help coach you through some steps to help you get where you need to be.
Loan Programs for First-Time Home Buyers:
30-Year Home Ready or Home Possible Loan
This option is a conventional loan that allows you to only put down 3% and have reduced PMI.
FHA Loan
Perfect for the buyer that wants to put less money down. Purchase your house with as little as 3.5% down!
Buyers Advantage Loan Only at SouthState Bank
An amazing deal for low to moderate income home buyers. Those who qualify for this loan can purchase with no down payment and no PMI. Find out if you qualify today!
If you are eligible for a no down payment mortgage, there will be costs associated with purchasing a home. You will need money for…
The earnest money - This is money given to the realtor to show that you are earnestly serious about purchasing the home. If the seller is paying closing costs, you can get this money back at closing. If you have a down payment, this will get counted towards your down payment at closing. In other words, this money is refunded so long as you close on the house. (Low appraisals and bad home inspections will also release the money back to you.)
Home Inspections – Approximately $350-500. This is not mandatory, but I would advise every home buyer to get the home inspected. The home inspector will make sure the house is safe and to let you know what kind of repairs are needed. Once you have the report, you and your real estate agent will send the list of repairs to the seller and their agent to see if they will agree to having your repairs fixed. This is money that cannot be refunded.
Appraisal – Approximately $450-$600. The lender will require an appraisal to make sure that the collateral for the loan is worth what the bank is funding the loan for.
Closing Costs - All mortgages have closing costs and you will be responsible for the closing costs unless you and your realtor negotiate with the seller to pay the closing costs when you put an offer in on a home. Closing Costs can ranger from 2% to 5% of the purchase price.
Even though I am located in Huntsville, AL, service Alabama, Tennessee, Florida, Georgia, South Carolina, North Carolina, Virginia, Colorado and Texas.
Not sure which program is right for you? Contact one of our specialists today! New South Mortgage can get you pre-qualified and find you the loan that meets your needs. Find out how you can get pre-qualified today!