The First-Time Home Buyers Guide

FHA first time homebuyer

New Year, New Home, New You?

Interest rates are trending up, but they are still extremely low.

Recent studies show that buying is still cheaper than renting. 2017 is a great year for first-time home buyers looking to finally purchase their first home.

What do buyers need to know and do to get great home loans and make their dreams of homeownership a reality?

Here are some tips for first-time home buyers ready to buy a home of their own.

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Check your credit report

Before you start the home buying process, the first thing you need to know is your credit scores. Credit is the most important factor a lender looks at when determining if they will approve a mortgage.

You can get a free copy of your credit report once a year at

You can also get a free copy of your credit reports and credit scores from all three credit bureaus for free at and

Get a pre-approval letter

Before you start looking at homes with a real estate agent. You will need to get a pre-approval letter from a mortgage lender.

A pre-approval means a lender has pulled your credit report, verified your income and down payment and you meet the requirements for a loan up to a certain amount. Once you have your pre-approval letter it’s time to start looking for homes.

Speak to Loan officer and Get Pre-Approved

Find a great local Realtor

It’s imperative that you work with a knowledgable real estate agent in your area. This is especially true for first-time homebuyers.

The cost for agents is already figured into the cost of a home. A Realtor’s commission is not paid out of your pocket, the seller pays the fee to their agent, as well as yours.

Some people think they can cut out the realtor and negotiate a cheaper purchase price, but this is imply not true. It will often end up costing your more money if you choose to go through a real estate transaction on your own.

It’s shaping up to be a very attractive year for first time home buyers

The data from Zillow, Curbed, and national Realtors’ associations shows that while inventory shortages in many areas have caused slower growth over the last few years, many move up and cash buyers have already made their real estate moves. Now cities like Miami and New York City are seeing thousands of new condominiums coming online.

Single family and mixed use developments are being built like crazy in cities, like Dallas. That means both existing home sellers and new construction builders are competing against each other heavily.

Bidding wars have subsided for a moment. And these sellers need first time home buyers to step up and make offers. That can add some powerful negotiation advantages for house buyers. It’s room to negotiate closing cost contributions, repairs, and upgrades, as well as other contract terms.

first time homebuyer9 Steps to Buying Your First House

In order to take advantage of this year and unique opportunity to get a good mortgage deal and house deal, and enjoy the process, buyers must understand the steps involved.

  • Check your credit
  • Maximize your credit scores
  • Get pre-qualified for a home loan
  • Gather all your documents
  • Pick a Realtor to help kick-off your home search
  • Find a home you love
  • Make an offer and get a signed contract
  • Complete your official mortgage application
  • Let your agent manage the transaction to closing and get your new home keys

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First Time Home Buyer Programs Near Me

There are many great first time home buyer grants and programs available. Many offer deals with low or NO down payments, low credit score and income requirements.

First time home buyer grants

first time home buyers tips for mortgage

HUD offers different first time home buyer grants and programs depending on the state you are buying the property in. Just go to the HUD website and enter the state you’re buying in to see what types of grants they have in your area.

Local Governments also offer a variety of home buyer grants and down payment assistance programs. Just go to your county website and search for home buyer assistance.

USDA Loan Program

The U.S. Department of Agriculture offers this rural development home program. USDA loans are great for first time home buyers because they have no down payment. They are also one of the cheapest mortgages available because mortgage insurance on USDA loans is cheaper than any other loan type.

FHA Loans

FHA home loans are the most popular mortgage among first-time buyers. More than 40% of home’s will be purchased using an FHA loan in 2017. The reason they are so popular, especially among first time home buyers is because of their flexible qualifying requirements.

It is much easier to get approved for an FHA loan than a traditional mortgage.

Do you have bad credit? No problem. FHA loans are the only type of mortgage that allows for low credit scores. Even if you have a 500 FICO score you could qualify with a 10% down payment. If you have a 580 credit score you could qualify for FHA with just a 3.5% down payment.

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What to Know about Home Shopping

There are a couple of other different things happening this year that buyers need to know. For one; the new president and White House administration has vowed to bring down taxes, boost jobs and wages, remove tough regulations, and make it easier for small business owners and home buyers to borrow with mortgages.

We’re already seeing lenders getting more aggressive and competitive in putting their money to work in borrowers’ hands. Buying a house with bad credit is possible with FHA Loans.

The only real negative to watch here is that with all the positive’s in the economy the Fed is expected to raise interest rates several times this year. That means first time home buyers need to step up and lock in the best mortgage rates while they can. Most will never see rates this low again in their lives.

Maximize your credit scores

tips to improve your credit score

The higher your credit score is, the better chance you have at getting approved and the lower your interest rate will be. Make sure your score is as high as it can be before applying with a lender. Here are some things to make sure you’re maximizing your credit scores.

  • Dispute any errors on your report
  • Pay down the balances on your credit cards
  • Have someone add you as an authorized user
  • Negotiate pay for deletes with any accounts in collections

Where to get started

There are several websites out there that allow you to search available homes, Trulia and Zillow just to name a few. You can view some of the top rated real estate websites on Consumer Affairs has ranked the top real estate websites.

You will also need to speak with a mortgage lender to get pre approved.

Are you ready to buy your first home?

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