Financing 101 for First Time Home Buyers

Buying a home requires responsibility of planning and determining what you can
afford and understanding which loan program will best meet your needs and within
your budget.  

The best approach is to divide the process into manageable tasks. The following deals
with the first steps of gathering your records, determining what you can afford, and
understanding mortgage options.



You do not want to be setting yourself up for failure with a unrealistic budget.
Go over your monthly fixed expenses and allow for emergency expenses as well.
Always allow yourself a cushion so you won't feel strapped month to month.

Review your credit report; know what your FICO scores are and if there is any false
reporting on it, contact the credit bureaus and get it corrected.
Your interest rate and costs will be completely indicative of your scores and overall
credit profile.

Also, take note of any derogatory credit that has reported in the past, because more
than likely you will have to provide an explanation to the lender of the reason.




For First Time Homebuyers there is consideration of a Conventional or an FHA loan,
fixed or adjustable, points versus no points, will you need help from a Down Payment
Assistance Program?

As a First Time Buyer you can use a Down Payment Assistance Program for the down
payment; however you will have loan costs so you either need to budget for this
expenditure or ask for seller assistance.

Your credit will really dictate in which direction you should go. From there your
assets, debt-to-income ratio, how long you think you will live in your home for, and
other key factors that will also impact which direction of loan choice you consider.

Then you can make an educated decision on the right loan and the most cost
effective way for you to realize your first home purchase in a responsible and
affordable manner.
Mortgage Basics
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Getting Your Financial House in Order
Mortgage Options
More First Time Buying Guidance