3 Tips To Master the Mortgage Process for First-Time Homebuyers

Your options depend on your loan amount, credit score, and down payment. 

The mortgage process can be one of the most frightening and daunting parts of buying your first home. With all the options, requirements, and fine print, it’s no wonder that so many people have decided not to buy. However, getting a mortgage doesn’t have to be a struggle. These three tips will help you understand what to expect so you’re prepared: 1. Understand the requirements. There are many requirements for getting a mortgage, including location, credit history, and type of loan. You'll need to factor in your debt-to-income ratio, loan amount, credit score, and down payment. You'll also need to consider other financial obligations, like car or credit card payments. The credit score requirement can vary based on the type of loan you are applying for, but typically, lenders are looking for a score upwards of 620. The best advice is to work on clearing any outstanding debt obligations, saving as much money as possible, and maximizing your credit score. This will improve your overall attractiveness to lenders and open the way to better loans. 2. Know your options. There are numerous options available when it comes to types of mortgages. There are fixed-rate mortgages, typically 30 or 15-year options, that have a consistent payment and set interest rate throughout the life of the loan. There are also adjustable-rate mortgages, known as ARMs, which can have a fluctuating rate throughout the life of the loan. Typically, the payments are cheaper on those, but you also have a fluctuating interest rate.

"The mortgage process can be tricky for first-time homebuyers, but resources are available to help you."

Loans vary between conventional, FHA, VA, and USDA loans. USDA and VA loans come with the benefit of a zero down payment. All of these loans have different eligibility requirements, so make sure you talk to your loan officer to understand what you do and don't qualify for. You can also refinance with a different kind of loan later on. That's good for buyers in this market when interest rates are slightly elevated. 3. Work with someone friendly, helpful, and straightforward. If you have a great agent, they probably have a great lending partner that they know and trust. Honesty and good customer service are paramount in this industry, and you don’t want to wind up locked in with someone you can’t trust or who you don’t like working with. We prefer working with Envoy Mortgage because of their competitive rates and quick closings, and I trust them. They've helped many of our clients save money on their loans and find a payment that fits their budget. Remember, the mortgage process can be tricky for first-time homebuyers, but there are resources available to help. If you have any questions about mortgages or would like to discuss your specific situation, I am here to help. Reach out to me by phone at (360) 868-8648 or send an email to jason@munozhomegroup.com. I’d be delighted to talk to you.