Buying your first home is an exciting milestone in life. Figuring out what kind of house you want and how much you can afford for a mortgage are two of the first steps to homeownership. It’s new territory for many first-time homebuyers, so don’t let any questions hold you back. Here are the top questions first-time homebuyers should ask their loan officer.
What type of mortgages do you offer?
The type of loan you may qualify for will depend on your credit score and what you can make for a down payment. To help make as many options available to first-time homebuyers in search of a home loan, PrimeLending offers over 400 mortgage loans and first-time homebuyer programs. You can choose to apply for a variety of purchase mortgages like fixed- and adjustable-rate mortgages or conventional loans. Popular first-time homebuyer mortgages include:
- FHA Loan – Backed by the Federal Housing Administration (FHA), these loans require smaller down payments than conventional loans and can work for those with lower credit scores. If you have limits on what you can afford, an FHA loan offers benefits like 3.5% down, flexible income and credit requirements, and lower closing costs.
- USDA Loan – The U.S. Department of Agriculture (USDA) backs this loan and is designed to help homebuyers with limited financing options which makes it a great option for first-time homebuyers. USDA mortgages provide benefits like no down payment requirements, low interest rates, and affordable mortgage insurance.
- VA Loan – For retired and active duty military members, and qualified spouses, the U.S. Department of Veterans Affairs (VA) loan is another government-backed loan option. First-time homebuyers who qualify for this loan can receive exclusive benefits like higher loan value, no private mortgage insurance (PMI), and no down payment.1
- Down Payment Assistance Programs2 – As a first-time homebuyer, you may also be eligible for a down payment assistance program. Having the funds on hand for a down payment can be a big hurdle for people buying their first home. Some down payment assistance funds do not have to be repaid and can also be used to help pay closing costs.
What fees are associated with taking out a mortgage?
Something common that some first-time homebuyers may not plan for are the additional fees associated with getting a mortgage. Your appraisal fees, inspection fees, and taxes are all part of your closing costs. There are also ongoing costs to budget for like interest and PMI. As part of the mortgage process, your PrimeLending loan officer will provide you with a detailed estimate so you know exactly what to expect.
How does my credit score affect my mortgage options?
Your credit score determines what loan programs you qualify for, your interest rate, how much home you can afford, and how much you will pay of the life of the loan. There are five components that are factored into how your credit score is calculated. Here’s how your credit score is determined:
- Payment History (35%) – Calculated based on the payment information on all of your credit accounts and shows lenders how timely you are with your payments.
- Amounts Owed (30%) – This is the total amount you owe across all of your credit accounts, including individual credit accounts, and how much of your total credit line is being used.
- Length of Credit History (15%) – How long you’ve had an established credit history, how long each account has been established and the number of years since you’ve used certain accounts.
- New Credit & Inquiries (10%) – Applying for too much credit within a short timeframe can impact your credit score so this looks at how many recent credit requests you’ve had.
- Types of Credit (10%) – This is a record of what kind of credit you have used. It includes the total combination of credit cards, auto loans, retail accounts, etc., that are under your name.
If you feel like you need to improve your credit score, or want to maintain it, try to reduce your debt as much as possible and pay off the accounts that you can. You can also set up payment reminders or automatic payments to avoid late payments.
How long does it take to get approved for a mortgage?
Since every borrower has a unique situation and loan needs, the approval3 time will vary based on things like the type of mortgage you apply for and additional required documentation, to name a few. A good rule of thumb is to allow for about 30 days for your loan to close. However, there are situations when we can close a loan sooner.4
If you have a tight timeline to purchase your first home, let your loan officer know as soon as possible so that we can plan accordingly. Oh, don’t forget that there are things you can do ahead of time to make your application process move a little quicker like getting qualified5 for a mortgage and gathering your financial documents.
Can I apply for a mortgage online?
We want to make your mortgage application process as simple and safe as possible which is why we offer a fully digital application process. Our process allows you to securely upload any necessary documents and connect your financial accounts. You can even use your cell phone to snap a picture of key documents. Our team will help guide you through the process from beginning to eClose.6
When in doubt, always reach out to your loan officer with your questions. PrimeLending mortgage experts are available days, nights, and even on weekends, to help support you on your journey to becoming a first-time homeowner. Contact your local PrimeLending loan officer today to get started.
1Down payment waiver is based on VA eligibility.
2Certain restrictions apply. Not available in all areas. Please contact your PrimeLending loan officer for more details.
3All loans subject to final credit approval and acceptable property. Conditions and restrictions may apply.
4Closing and processing times are dependent on many factors including receiving timely documentation from the borrower.
5All loans subject to credit approval. A qualification is not an approval of credit, and does not signify that underwriting requirements have been met. Conditions and restrictions may apply.
6eClose allows for electronic signing of most (not all) documents prior to closing.
