How Using a Mortgage Company Can Help First-Time Homebuyers Save Time and Money

December 1, 2021

Tips for First-Time Homeowners in Seattle and How Using a Mortgage Company Can Help

Buying your first home is an exciting life experience. Many people dream about the kind of home they’d love – Victorians, ranches, or split levels in the perfect location. However, it can sometimes be a stressful one, too. Between finances, design choices, and the moving process, purchasing a house can bring up many questions. Luckily, there are multiple kinds of help for first-time homebuyers, such as the help available from experienced mortgage companies. If you don’t know where to start, they can be a wealth of knowledge – as long as you’re working with the right one.

Getting help from a mortgage company when buying your first home can help answer all of your real-estate-related questions while ensuring the financial aspect of buying a house is handled.

Even though they offer a lot of help, when it’s your first time, you may not even know the questions to ask. Here are a few important things to keep in mind when buying a home for the first time.

First time home buyers

Tips for First-Time Buyers

1. Know Your Loan Options

There are various loan options out there for first-time buyers, so it’s important to know what’s available to you. Some loans are government-backed, while others are offered from private lenders. The most common loans offered are FHA loans and VA loans. Each of these loans has different requirements, from credit scores to the location of the home you want to buy. So, before you confirm any form of a payment plan on your home, educate yourself on the different options offered and what will work best for you and your current situation.

Mortgage tips

2. Work With an Experienced Loan Company

Working with an experienced lender will make the process of buying your first home much easier for you. Your lender can educate you about the available loan options offered to you and help you find a financial plan that works. The lender can also give you advice on any questions you may have about the home-buying process. In addition, working with a lender will help eliminate extra time and money spent on buying a home.

3. Don’t Forget Preapproval

Before you begin house-hunting or making any serious decisions, it’s essential to go through the mortgage preapproval process, especially when this is your first time buying. When you’re preapproved for a mortgage loan, you’ll receive a document that explains exactly how much funding you can receive. This amount is based on different factors such as credit score and income.

Getting preapproved will help immensely in the budgeting process of your home-buying journey. Without having a budget or knowing the money you’ll have available, it’s impossible to make a sound decision on a purchase. Preapproval helps you set your budget and make more substantial offers.

4. Maintain Your Credit

Your credit score often plays a hefty role in decisions made by lenders when determining the funds that you’ll receive. You will need to maintain a good credit score when trying to buy your first house. Lenders want to see that you are able to pay your bills consistently. Most lenders will say you’re ineligible for funds or won’t give you much without a decent credit score.

Mortgage down payment

5. Get Ready for the Down Payment

Down payments can be one of the most intimidating parts of buying a home, so it’s a good idea to start saving up early. The standard down payment across the country used to be around 20 percent of the home’s price. Now, the average down payment can be anywhere from 5 percent to 15 percent. That being said, it’s still important to have a good amount saved to be able to pay that percentage when you find your dream home.

Understanding First Time Home Buyer Programs

Because being a first-time home buyer can come along with difficulties and confusion, there are a variety of programs that were created to help first-time buyers in this process. Here are some of the most common first-time homebuyer programs:

1. FHA Loan

FHA loans are the most popular loan choice for first time home buyers. Issued by the Federal Housing Administration, FHA loans are ideal for those who have lower credit scores or have not made any large purchases, such as a home, before. FHA loans also require smaller down payments than other types of loans, making them a top choice for first timers.

2. VA Loan

VA loans are for those who are active members or veterans of the military. These loans require no down payment and provide aid to those who served in the military by helping them find safe housing when they return home. VA loans can be provided by both the government and private lenders and are backed by the U.S. Department of Veteran Affairs. One of the best parts about VA loans is that they are often granted multiple times.

3. Freddie Mac and Fannie Mae Loans

Freddie Mac and Fannie Mae loans are conventional loans that were created by a program initiated by Congress years ago. Both Freddie Mac and Fannie Mae loans offer refinancing mortgage and renovation assistance to those who are in need of it. These programs offer minimal down payment percentages compared to the average lender, but they do require a decent credit score of around 620 or higher.  

4. First-Time Buyer Loans in Seattle

Most states offer different options for first-time homebuyers in their area. The National Council of State Housing Agencies has created resources to find information on your state’s programs. As a Seattle mortgage company, we can offer two primary first-time mortgage programs that can be applied to different loans in the state of Washington.

Find a Reputable Seattle Mortgage Company

Buying a home is a complex process, especially when it’s your first time. By working with a Seattle mortgage company that you can trust, you can climate confusion and extra time being spent on the process of buying your dream home.  Instead, you can focus on securing a loan, making a down payment, and moving in. A few minutes of research can potentially save you thousands.

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