Now's the time for First time home buyers to buy their first home

By: Alice Shown
Submitted: 2008-11-27 22:18:16
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Realtors are saying that this is a great time for first time home buyers to buy a home. Home prices have fallen to the lowest level in years, and in many cases you can now buy a home at prices we haven’t seen in the last 5 years. There are a lot of homes to choose from in the housing market and there is money to lend to qualified buyers. Maybe you want to stop renting or you’ve just married or you’re finally ready to move out of your parents’ basement. In any case, you’ve decided to purchase real estate, so what’s your first step?  

Before ever beginning to look at homes with a Realtor, find out how much you can afford by first consulting with a mortgage broker. The first step is to gather up your documentation. You will need one month of pay stubs, the last two years of W-2s and two months of bank statements. As lenders, we need to be able to verify that the borrower makes enough money to be able to pay back the loan. You will also need money for a down payment. Typically, a down payment of at least 5 percent is needed for a conventional fixed-rate loan and a 10 percent down payment if a buyer is considering purchasing a condominium. Though many first-time home buyers can qualify for conventional loans, more buyers will find that FHA (Federal Housing Authority) financing might be the right fit. 

FHA is also a fixed rate loan and the pricing is similar. A big advantage is that buyers only need a 3.5 percent down payment and all of that can be a gift. First time home buyers can qualify for an FHA loan with credit scores under 740 and even down to the high 500s. So the FHA is a better fit for most first time home buyers. 

Becoming pre-approved for a mortgage and knowing how much you can afford is the first step to becoming a homeowner. The key for First Time Home Buyers Loan  is to talk with a lender before they are ready to put in an offer, and not wait until their lease is about to expire. If we have time we can coach the buyer, so if they need to clean up some things on their credit, or if they need to save for a down payment or figure out how they can get the cash to close, they can get themselves in shape and be ready to buy when the right house comes along.

The first step is to gather up your documentation. You will need one month of pay stubs, the last two years of W-2s and two months of bank statements. As lenders, we need to be able to verify that the borrower makes enough money to be able to pay back the loan.

If we have time we can coach the buyer, so if they need to clean up some things on their credit, or if they need to save for a down payment or figure out how they can get the cash to close, they can get themselves in shape and be ready to buy when the right house comes along.

Peter Thompson is an Illinois Mortgage Broker who provides superior First Time Home Buyers Loan & mortgage service and competitive mortgage rates in Chicago, the Chicago area and throughout Illinois. How to Save Thousands when Buying a Home and Getting a mortgage.

Article source: Expert Articles

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