First-Time Homebuyer Checklist

Everything You Need to Know Before Purchasing Your First Home

Are You Ready for a Home? This is probably the most important question to ask yourself before you decided to buy a home. Many first-time homebuyers are not sure exactly sure what buying a home entails. Here are a few things to consider before you start shopping for your home: • How much can you afford? (More on this later) • Take a good look at your credit score. It is one of the biggest factors in mortgage

approval. Most lenders will require a score of at least 620, but buyers with scores above 720 can receive more attractive rates. However there are programs for those with less than perfect credit scores, so don’t count yourself out before checking!

• What sort of house do you want? When shopping, remember the three most important things: location, location, location. Then think about what features you need in a home.

http://www.newamericanfunding.com/first-time-homebuyer.aspx

The Documents You’ll Need Many times, a home loan begins with a pre-approval letter To get approval from a mortgage lender like New American Funding, you’ll need a few things to prove you can afford a mortgage.

• Valid ID • Proof of rental payments (if you’ve been renting) to show

you can pay bills on time • At least 3 – 6 months of bank statements to prove your

income • Two years of employment documents and your most recent

pay stub to show that you’re earning money.

http://www.newamericanfunding.com/blog/post/2012/05/30/The-Conditions-Behind-The-Loan-Commitment-Letter.aspx

How Much Home Can You Afford? Just because you’re approved for a certain loan range doesn’t mean you have to maximize your mortgage potential.

• Stay within your comfort zone. • Take what you’re currently paying for rent and consider new costs like insurance,

property taxes and higher utility bills. • Mortgage calculators can help you determine the loan term and amount that you can

afford, then you can look for a house that meets your budget.

http://www.newamericanfunding.com/mortgage-calculators.aspx

Find a Real Estate Agent, Find a Home You don’t need a real estate agent to find a home, but they can make the process much easier – especially once it’s time to deal with sellers, loan officers and escrow officers. What Can a Real Estate Agent Do for Me? • A trusted real estate agent can do more than just find you

a home. • Most real estate agents have first-hand knowledge of all

the fees and paperwork that you’ll be dealing with, and can sometimes score a better deal.

• Real estate agents also have access to a database of homes available in the area, which can seriously reduce the time it takes you to find your home.

Choosing the Right Mortgage This is one of the most complicated questions for any first-time homebuyer – which mortgage should I choose? Fixed-rate, FHA, an ARM loan? Choosing the right loan is a big decision, but your loan officer can help make the choice that is right for you. Take our Home Loan Quiz to see which is right for you. Fixed-Rate Loans • Usually in 15- or 30-year loan terms • Offer stability and safety in your payments

Adjustable Rate Mortgage (ARM) • These loans have a rate that periodically adjusts after a set period of time. • Can help you afford a larger house due to lower payments in the first few years • Great for people who may plan on moving quickly FHA Loans • These are government-assured loans that have low interest rates and down payments as low as 3.5% • Great for first-time homebuyers, but be ready for additional costs like Private Mortgage Insurance premiums

http://www.newamericanfunding.com/blog/post/2012/04/18/Which-Home-Loan-is-Right-for-You.aspx

Fees and Costs So what costs should you be ready to pay once you have been pre-approved, found your home and applied for a mortgage? • The Down Payment – This is a cash payment made to your lender upfront to help secure

financing. FHA loans require down payments as low as 3.5%, but conventional loans may require down payments as high as 20%.

• Closing Costs – Buying a home comes with a handful of fees that are due before your funding is released - attorney fees, inspection fees and more. These can be around 3% of the home price.

• Earnest Money – This is often applied as part of your down payment or closing costs, but Earnest Money is a deposit (usually no more than 5% of the home price) to show the seller you are ready to buy.

Visit our mortgage glossary for more important terms: http://www.newamericanfunding.com/mortgage-glossary.aspx

First-Time Homebuyer Checklist

Learn More about First-Time Homebuyer Programs www.NewAmericanFunding.com/first-time-homebuyer.aspx