First Time Home Buyers
Buying your first home is an exciting time in your life, but before you take the leap to homeownership, you need to be certain that you are prepared. VA the Fairway can answer many of the questions you may have when considering transitioning from renting into buying your first home.
How is your credit?
Before you consider purchasing a home, your credit report will need to be reviewed to check for inaccuracies. While it is not necessary to have a perfect credit score to apply for a home mortgage loan, it is important that your credit score is correct and that your past few years of credit history show that you are responsible with your debt repayment. Even if you have some credit issues, there are some great tips for improving your score.
Can you afford the monthly payments?
Even if you have saved enough money for your down payment, you need to be certain that you are able to afford your monthly mortgage payment. Do not forget to factor in expenses like property taxes, insurance, HOA fees, etc. We will go over your budget and your financial goals to make sure that you are comfortable with your mortgage payment and still have enough money each month to enjoy your life in your new home.
How Much Home Can you Afford?
Typically, the first question would-be homebuyers ask themselves is, "What can I afford?" There are many factors that determine what a reasonable mortgage payment should be for an individual, including annual income, existing debt payments, down payment (if any), as well as additional costs like homeowners insurance and housing association fees. Your VA loan specialist will help you determine how much you can afford based on your qualification and your comfortable monthly payment.
Have you saved enough for a down payment?
For most first-time homebuyers, a home down payment is one of the largest investments you will ever make. While there are many loan programs that can help you reduce the amount you’ll need to put down, a larger down payment will help you create more instant equity and reduce your monthly payments
What Type of Loan Should I Get?
There are many financing options available for homebuyers out there, each with their own unique advantages. For most veteran and active duty military members, we at VA the Fairway highly recommend the federally-backed VA Loan due to its many advantages and benefits over traditional loans.
In addition to the VA Loan, VA the Fairway is proud to offer a multitude of financing options for homebuyers; including but not limited to: USDA loans, FHA loans, traditional ‘Conventional’ mortgages, and JUMBO loans.
When purchasing a house, your real estate agent may suggest getting “pre-approved” or “pre-qualified” before you buy. While these mortgage terms sound similar, they are in fact very different. For a buyer, a pre-approval letter is going to be more beneficial to you in the home buying process than a pre-qualification letter, as it shows a seller you are more serious about your offer.
A mortgage pre-qualification* is an initial assessment by a lender of a borrower’s ability to qualify for a mortgage loan. When you are pre-qualified, your credit report may or may not be pulled, and information about your employment, income, assets and liabilities are given by you to the lender. However, none of this information is verified by the lender, which makes it less accurate than a pre-approval (see below). In the case of a pre-qualification, the lender is reliant on the buyer to provide an accurate estimate of these items.
A pre-approval** is determined after a more in-depth analysis of the borrower’s income, expenses, assets, liabilities and credit score by the lender. Generally, documentation is provided by the borrower for all of the above items so that the lender can verify all of the information that was provided verbally at the pre-qualification stage. Remember, a pre-approval is not a commitment to lend, as only an underwriter can provide that. However, a pre-approval letter lets the seller know that the information you have provided to the lender has been verified, and it appears that the borrower will be approved for the loan. In the case of a pre-approval, the seller will be more likely to take your offer seriously.
Once you become serious about purchasing a home, you should consider being pre-approved for a mortgage so that you know how much home you can afford and we can discuss your options. It is important to remember that neither a pre-approval letter nor a pre-qualification letter guarantees that you will be approved for your mortgage, but by applying for pre-approval you are one step closer.
If you would like to get started on your Pre-Approval now, or if you have more questions, please give one of our VA Home Loan Specialists a call at (888) 301-3465 or start your VA Home Loan quote online. There is never any obligation and you will be one step closing to owning your new home.
*A pre-qualification is not an approval of credit and does not signify that underwriting requirements have been met. This pre-qualification is based on a preliminary review of the credit information you provided to Fairway Independent Mortgage Corporation. This review does not require that you provide verifying documentation, which will be required for final loan approval. If you have submitted verifying documentation, you have done so voluntarily. You understand that submitting verifying documentation is not a requirement to receive an estimate of closing costs associated with a mortgage loan. If you would like to receive an estimate of closing costs associated with the proposed mortgage loan prior to identifying a property, request a pre-application worksheet.
**Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation which has not been reviewed by Underwriting. Final loan approval is subject to a full Underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, and income information, and a satisfactory appraisal.