First-Time
Home Buyer Guide
Vision Home Mortgage - Offering First-Time Home Buyer Programs
Exploring First Time Home Buyer Options
Navigating the world of homeownership for the first time can feel overwhelming, but we’re here to simplify the process. Let’s explore the loan programs, benefits, and resources designed specifically to help first-time buyers achieve their dream of owning a home.
Owning a home offers both personal and financial advantages. When you own your home, you have the freedom to customize it to reflect your personality and needs, whether that means painting walls, upgrading your kitchen, or creating your ideal backyard. Financially, each mortgage payment builds equity in your home, acting like a savings plan for the future. Additionally, homeowners often enjoy tax benefits; consult a tax professional to learn about potential deductions like mortgage interest. Lastly, owning a home provides stability—you won’t need to worry about rising rent or a landlord’s decisions impacting your living situation.
Contrary to popular belief, a first-time home buyer isn’t limited to those purchasing a home for the very first time. If you haven’t owned or held an interest in a property within the past three years, you may qualify as a first-time home buyer. In some cases, you’ll need to complete a homeownership education class, which helps prepare you for the responsibilities and financial obligations of owning a home. These programs ensure you’re ready for success as a homeowner.
Owning a home is rewarding, but it also comes with responsibilities. The most significant is making your monthly mortgage payment, which usually includes the following:
- Principal: The amount borrowed to purchase the home.
- Interest: The cost of borrowing the money.
- Taxes: Annual property taxes, often paid in installments through your mortgage.
- Insurance: Homeowners insurance, required to protect your investment and the lender’s interest.
In some cases, you may also need to pay:
- Mortgage Insurance: Required for certain loan types, like FHA loans or Conventional loans with less than 20% down.
- Homeowners Association (HOA) Fees: Applicable if your home is in an HOA-managed community.
- Solar- Sometimes home have solar payments you may be responsible for that is not included in the monthly payments.
You’re also responsible for regular maintenance and repairs to keep your home in good condition and preserve its value. From fixing a leaky faucet to replacing a roof, these tasks are essential to safeguarding your investment.
There are various programs designed to make homeownership more accessible for first-time buyers:
- FHA Loans: Backed by the Federal Housing Administration, these loans are ideal for first-time buyers due to their lower credit and income requirements. FHA loans require a down payment of just 3.5%, making them a great option for those with limited savings. However, FHA loans include mortgage insurance.
- Conventional Loans for First-Time Buyers: Conventional loans often require higher credit scores but allow for down payments as low as 3%. Once you reach 20% equity, you can remove mortgage insurance, saving you money over time.
- Down Payment Assistance Programs: Many state and local programs provide grants or low-interest loans to help cover your down payment and closing costs. Eligibility often depends on your income and location.
Explore these options with your mortgage broker to find the program that best suits your needs.
The Steps to the Mortgage Process
In this guide, we’ll break down each step of the mortgage process in detail. While some elements may overlap with the real estate side, our primary focus will be on helping you understand the mortgage journey from start to finish.
Getting Pre Approved
Getting pre-approved and pre-qualified might sound similar, but they are actually quite different. Pre-qualification is an informal process that doesn’t require documentation to verify your creditworthiness, making it more of an estimate than a confirmation. On the other hand, pre-approval involves a thorough analysis of your credit, income, and assets, providing a verified assessment of your ability to secure a mortgage.
A pre-approval not only strengthens your position as a buyer but also signals to sellers that you’re serious and financially capable of completing the purchase. While the required documentation can vary depending on your situation, some key documents are typically needed for everyone during the pre-approval process. Here's what you can expect:
- Clear copy of photo I.D.
- Recent 30 days' pay stubs for all jobs
- Recent 2 years W2's or 1099's
- Recent 2 months' bank statements for all accounts that funds will be used for the purchase of the home
- Sign a credit authorization form
Documentation will be needed for each individual that will be on the loan and the documentation listed above may not be applicable to everyone.
Getting Into Contract
Underwriting
Closing
At this stage, we will send you a Closing Disclosure detailing your loan terms, mortgage payment, and associated fees. Signing this disclosure starts a mandatory three-day waiting period, so completing it promptly is crucial to stay on track for your closing. Our goal is to complete everything well in advance of your closing date, ensuring a smooth and stress-free experience. With all preparations done ahead of time, we can often accommodate an earlier closing date if all parties agree.
Typically, closing will be the only time you'll need to physically sign loan documents. Title will coordinate your signing appointment, either at their office or with a mobile notary who comes to you. The seller(s) will also sign their required documents. At this point, the title company will provide wiring instructions for your funds. Always call the title company directly to verify wiring instructions, as this information should never be communicated through email due to potential fraud risks.
Once your funds are wired, and you've completed the final walkthrough of your new home with your real estate agent, we’re ready to proceed. Your loan will fund, the deed will record, and finally—you’ll receive your keys and officially own your new home!
WIRE FRAUD DISCLAIMER: Vision Home Mortgage will NEVER ask you, via email, to wire or send funds to ANYONE, not even a title company. NEVER trust wiring instructions sent via email. Be aware that cyber crime can affect everyone and these emails can be convincing and sophisticated. ALWAYS independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. NEVER wire money without double-checking that the wiring instructions are correct.
