With the availability in today’s real estate market, receiving a low interest mortgage rate combined with the government backed programs provided by FHA, stepping in to the life long dream of becoming a first time home buyer is completely attainable.
Don’t believe it to be true? It is understandable to look at all the information floating across the newspapers, television screens, computer websites, social sites, mobile apps, home flyers, and so on and so on. But the reality is this, with the opportunities found in FHA loans, becoming a first time home buyer is in your future; you just need to start walking towards it.
As a potential home buyer, for the first time, lists of details and responsibilities grow long and last throughout each year. However adjacent to the list of adulthood lies the freedom of homeownership; planting what you want, painting the colors of each room to your desire, listening to music as you entertain family and friends…having a home is a haven for today and an investment for your tomorrow. Within the FHA loan programs available now, this haven we like to call ‘home,’ can be yours.
Now before you go running towards making an offer, there are some important items to know and understand before you proceed in buying your home in Orange County, Los Angeles, or Ventura and we’ve listed them below:
A. Before The Home, Get The Loan! As a first time home buyer, make sure you talk with an FHA lender to line up a pre-qualification for a home loan. This will save you time, frustration, and money later when you are further into the home buying process and discover that either the home is above your price range, or the sellers will not accept your offer because you are not considered to be an ‘approved’ buyer.
· Banks, Credit Unions, and Mortgage Bankers supply home loan.
· Mortgage Brokers process the loan meaning, they will file your application for the home loan, process all and necessary loan documents, and manage the loan through funding.
· If you have possible bad credit, consult with your lender for directional steps to improve your credit prior to the process.
B. Save Your Money! Banks supply you with the FHA loan will require an amount of savings in your bank, preferably for a minimum of 3 months. Once you have received your FHA loan approval and found a home, you will need to make a down payment to secure the next steps along with charges placed towards closing costs at the end of the process.
· Down payment requirements over an amount vary the type of home loan acquired. To know the percentage expected per the home’s purchase price, best to discuss in detail with your lender prior to putting in an offer to eliminate any home buying surprises.
· Closing costs refer to charges over services related to the closing of your home buying and home loan transaction. They include (but not limited to): Escrow fee, Title Policy Issuance fee, Mortgage Insurance fee, Loan Origination fee, Fire and Homeowners insurance fee, County Recorder fee
· Be sure to consult with your lender over an estimated amount of closing costs to help you plan.
C. Know Your Loans! Overall, there are 2 types of loans: Conventional and Government. For first time buyers, Government Loans offer more buying comfort and power over others.
· Government Loans for first time home buyers include the Federal Housing Administration Loan, known as a FHA Loan.
· FHA loans offer both fixed or adjustable interest rates for mortgage home loan.
· Talk with a lender specializing in FHA loans to informed with the most up to date information.
· With an FHA, the loan amount is backed by the government. In exchange, you must attain mortgage insurance.
· Mortgage insurance helps to protect the lender providing you with the loan from possible loss should you not be able to comply with the mortgage payments.
· Conventional Loans do not require mortgage insurance. In exchange, the lender does require a larger down payment on the loan prior to closing.
D. Educate Yourself! In addition to all the avenues of knowledge available to you 24-7, many organizations offer first time home buying and loan counseling. Through these classes, you will learn and discuss over each of the steps towards becoming a homeowner. Such topics include:
· Selecting your home
· Realtor services and responsibilities
· Loan programs: Conventional and Government like FHA loans
· Responsibilities as a homeowner
· How and how much to save for a down payment
· Additional important items within the home buying and loan process
· Some first time home buying programs require the home buyers to attend an approved class like this in order to receive eligibility for various programs
Now that we’ve covered the first few points of things you need to know as a future home owner, join us each week to continue learning more about all of the what’s, how’s, when’s, why’s, and who’s for your FHA home mortgage loan and purchase.