The process for a first time home buyer is really a simple but complex process. The first thing a first time home buyer most do is seek out a lender that is experienced in working with first time home buyers that can carefully guild them thru the process.
first time home buyers that can carefully guild them thru the process. This should be done far enough in advance to make sure that all requirements can be met for the specific loan program to meet the first time home buyers needs. If all requirement can not be met then a detailed plan of action most be presented to the first time home buyer to help them prepare for qualifying in the near future.
Once the lender is selected a careful review of the credit report is the first step to see if there are any issues these need to be addressed. If there are credit issues then a recommended program such as www.vrtechmarketinggroup.com/Mbustamonte can be utilized to help resolve the credit issues.
A review of all current financial obligations to determine a level of affordability based on “effective after tax interest rate”. It is important for the first time home buyer to understand the after tax rate that takes into account additional income tax breaks as well as interest write off that the IRS provided for persons that have a mortgage. For more information on “after tax interest rate” go to www.mtgplanning.com/taxes.
Here is a list of items that can be required to qualify for a first time home buyer programs.
•2 years of continues employment
•2 years of verifiable residency
•2 months of principle and interest, taxes and insurance in reserves (savings, checking or investment funds)
•A first time home buyer certificate
•Proof of a least $500.00 down
Many first time home buyer program requirements vary but this items are normally standard items.
Once it is determined that you qualify for a home loan a pre approval letter can be issued and it is time to seek out a qualified Real Estate Professional. Many lenders have qualified Real Estate agents that they work with and can refer you to them or you can interview a few on your own until you find someone you feel comfortable with.
In today’s market place sellers are prepared to contribute money towards paying your closing cost which normally consists of the following items;
•Odd day’s interest
•Home owners insurance
•Reserves for taxes and insurance
•Title company charges
These fees are usually covered with the allowable 3% seller concessions that the lenders will allow a seller to pay on behalf of the borrower. Real Estate agents are normally well versed in negotiating these types of contracts for a buyer.
In our next issue we will discuss the appraisal process and title company role in the first time home buyer process.
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