Ask Auntie Fran. Your Realtor with A Plan
First Time Buyers Here’s What You Should Know
By Fran D. Littleton, REALTOR, GRI, LMC
My first time as a homebuyer was many moons ago, but I am reminded every day of how frightened I was leading up to the experience.
A first-time home buyer is defined as anyone who has not owned a home in the last three years. I am currently working with a 30-something couple who is purchasing their first home. The wife is an elementary school science teacher who was able to find 100% conventional financing. That means the couple had no down payment.
Because it was a conventional loan and they were first-time buyers, I was able to consult with them and explain the financing options which led to their successful search for a lender that offered the product they preferred. Even though they qualified for the FHA or conventional, conventional was the best route for them because of the lender’s “zero down” payment incentive.
Things First Time Home Buyers Should Know:
1. Education is important. Any unforeseeable occurrence can frighten the buyer and sour the experience. Your agent should take as much time as needed to thoroughly explain the options. The first-time buyer’s experience must be exceptional, not only for the potential buyer, but for all parties to the transaction.
2. Your typical down payment for FHA is 3 1/2 percent for the home. Most conventional mortgages are 5% although some lenders with different programs offer less. The lender that my couple used is an example of an industry-based lending program that catered to teachers and first responders.
3. Closing costs typically run between three to six percent of the sales price. In some instances, the seller is willing to contribute towards the buyers closing costs. There are also programs out there for down payment and closing cost assistance for first time buyers.
4. Veterans Administration or VA loans have no down payment.
5. Another important necessity is the pre-approval process. Sellers want to know they have a viable prospective buyer. Ensure that you search for a lender who understands your needs and can give a realistic list of options to ensure you will be able to not only obtain the letter but also take necessary closing cost considerations into account and offer payment options you can manage.
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As one of the preeminent real estate professionals in the community, Fran is dedicated to providing the finest service available while breaking new ground. She brings over 35 years of experience in sales and customer service--including more than 17 years in real estate--to better aid you in realizing your dreams. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game.
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