Buying a home can be quite similar to getting married: you feel butterflies in your stomach and a mix of fear, excitement, and even a bit of anxiety. However, unlike your wedding day, you need to rein in those emotions and keep your eyes peeled to buy your dream house. 

Buying a house often involves mortgages, and understanding them requires a clear grasp of their complex processes and details. That’s why you should familiarize yourself with the basic financing options available to first-time homebuyers. Here are some basic steps you should consider while weighing your financial options:

Talk to a Financial Advisor

As a first-time homebuyer, your mind is probably reeling with a million questions and a long list of worst-case scenarios. Seeking professional guidance from mortgage advisors, real estate agents, and financial planners is highly recommended. These experts are familiar with all types of financing options and can give you useful insights to ease the process of buying a house for the first time. 

They will help you understand the pros and cons of each financing package and special programs or grants and can answer those unsettling questions so you are more confident in striking a beneficial long-term financial deal. 

Compare Offers

To make an informed decision, you should compare the different loan products available to you. There are various types of mortgages available, such as:

  • Fixed-rate mortgages
  • Adjustable-rate mortgages (ARMs)
  • Government-backed loans (FHA and VA loans)

Get Ready to Be Evaluated

Lenders will evaluate you based on the following factors when you borrow money to buy your dream home:

  • FICO score
  • Income
  • Assets
  • Debts
  • Credit history

You will also have to decide whether you are opting for a fixed-rate mortgage or an adjustable-rate mortgage, the number of years you need to pay off your mortgage, and how big your down payment needs to be.

Look for Government Programs

Programs, like the Federal Housing Administration (FHA) loan program, offer attractive incentives such as decreased down payment eligibility and special grants for approved lenders. If you are a veteran or an active-duty military member, another popular option is VA loans. You can build a home, make energy-efficient home improvements, or refinance your mortgage later on with these types of loans.

Flexibility in Underwriting Guidelines

Some special programs designed for first-time homebuyers often provide more flexibility in underwriting guidelines. For instance, FHA loans accommodate lower credit scores compared to conventional loans, making homeownership more accessible for those building up their credit history. Plus, government programs usually have more relaxed requirements when it comes to debt-to-income ratios.

Harness Increased Borrowing Power

First-time homebuyers can get more liquidity if they seize on special loans that require lower down payments. This allows you to keep more money in the bank to fund renovations and home improvements or even create a financial safety net for unexpected expenses.

These are just some of the important details to keep in mind when you’re exploring financing options that are right for you. The more you know, the better equipped you’ll be to make informed decisions about buying your dream home.
Don’t let uncertainty hold you back. If you’re looking to buy your first house, get in touch with High Quality Mortgage. We offer an array of mortgage products to suit your needs. Contact us today!