Mortgage 101 for First-time Home Buyers
At Sente Mortgage, our loan officers work with borrowers at every stage of their home-owning lives, from first-time buyers to those relocating, expanding, or scaling down. We know that every home purchase is exciting, and we also recognize there is something magical about buying your first home. It’s a really big step, and we work very closely with you to make sure you get it right.
As you may have already discovered, simply saying, “We’re going to buy a house,” can open a floodgate of unsolicited advice from well-meaning family and friends. While they may be a valuable source of referrals (for Realtors, contractors, etc.), we urge you to go directly to a mortgage professional when it comes to borrowing.
In fact, you can give us a call right now at Sente Mortgage, and we’ll give you the complete 101 on applying for a mortgage. Or, if you’d like to learn a little more before you start, here are some mortgage basics:
For most buyers, the first step is to get pre-qualified.
This is a less formal process of reviewing your short- and long-term goals, your finances, and your loan options. It will help you create a budget and determine a price range for your home. A pre-qualification letter will strengthen your position when you make an offer on a property.
The next stage is to actually apply for a loan.
Your mortgage banker will determine your credit score, help you resolve credit issues, and identify a specific loan that will best meet your needs. When you apply, you will be asked to provide a variety of documents in four general categories:
- Income (including W-2 and 1099 forms, pay stubs, tax returns, etc.)
- Assets (bank and investment statements, vehicle titles, list of other significant assets)
- Liabilities (statements for auto/student/credit card debit, child support, alimony), and
- Personal documents (driver license/ID, divorce decree, VA forms, as applicable) Note: Gathering documents ahead of time will speed the process considerably.
In most (but not all) cases, you will need to come up with money for a down payment.
This amount typically ranges from 0 to 20 percent of the purchase price, depending on your mortgage. Your loan officer can suggest sources for down payments.
Once your loan application is complete, it moves first into the processing phase, and then into underwriting.
Except for the appraisal of your new property, most of this goes on behind the scenes, though you may be asked for additional information to complete the process.
The final step – closing!
This includes a final walk-through of the property, a complete review of the loan terms, the payment of closing costs, and the careful review and signing of many documents. The keys change hands, and you now own your first home. Congratulations!
If you have questions, or if you’re ready to talk about buying a home, your Sente Mortgage loan officer is ready to help. Give us a call today.
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