Most first-time buyers want to jump right into the home buying process. The problem is that as they shop, they begin to feel frustrated. This is because they don’t know what options are available to them as buyers or because they don’t understand all of the steps in financing. Use this step-by-step guide to learn more about this complex process.

Get Documents

While most first time buyers will be tempted to contact a realtor first, it is important to talk to a mortgage broker before starting. You should start by gathering all of your financial information, including bank statements and paystubs for the past 30 days. Use any documents you have relating to your income to help you decide what you can afford. All lenders will require the same information, and having it handy can make the entire process go smoother. Use a checklist to learn about the documents you need to have and how much history you need to show.

Get Your Pre-Approval Letter

Before starting to look at homes, buyers should get prequalified with a lender. During this process, the lender will determine how much of a home you can afford. A seller will also be more likely to accept your offer after you have become prequalified. A QC process will allow your lender to review the details of your credit report before closing the home. This is to check to see if the consumer took out any additional loans. If they have, the paperwork needs to be sent back to the underwriter. After preapproval, don’t open any new lines of credit until after you have the home.

Find a Quote

Once you have settled on a home, you will need to get a quote from your loan originator. During this time, you will be able to examine all of the loan options you have available before committing to one.

First Time Buyer Loans

First time home buyers have some exclusive options with lenders. These special loans may have a lower interest rate or down payment. These loans may also have a deferred payment option in situations of hardship. These loans do come at a cost, such as higher mortgage insurance or ineligibility for later refinancing.

Apply for Your Loan

Once you have chosen the loan that you want, all you need to do is apply. This process doesn’t usually take long, as your mortgage lender should have gotten all of your paperwork during the pre-qualification process. In some cases, additional information will be needed to process the loan.

Get Approved

After you submit all of your paperwork, you will need to wait for final approval from your lender. Afterwards, an appraisal will be done to confirm the value of your new home. A lending company may also perform a title search to ensure there are no liens against the home. Lastly, your underwriter will prepare the documentation and ensure that the sale complies with all local regulations.

While applying for the loan may be a confusing process, we hope to make it a little easier. Contact ustoday to learn more about prequalifying to buy a home or get a loan quote.