| First Time Homebuyers
It is important for first time buyers to learn as much about the home-buying process ahead of time, and also to rely on a good team of professionals to help you through the process. Select a loan officer and a Realtor with whom you feel comfortable and who educates you in a way that helps you understand the decisions you make regarding your financing and home purchase.
It is also important that you understand all the costs of home ownership and evaluate those costs in relation to your income and other expenses. You may want to consult with a CPA or Financial Planner. You will want to make sure you have the financial capacity to purchase a home without getting in over your head, and be able to handle unexpected changes in your financial situations.
Getting a pre-approval from a loan officer is part of this evaluation process. You can ask your loan officer to prepare different purchase scenarios at different price levels. You should also receive a GFE - a Good Faith Estimate of the loan costs and your estimated payments.
The California Housing and Finance Administration (CalHFA) offers special programs for first time homebuyers. If you qualify for this program, you can get an interest rate that is lower than the current market rate. You can also obtain secondary loans that allow you to defer payments and interest until you sell your home or refinance the loans. Additionally, many communities offer local grants for down payment or closing cost assistance. Your loan agent should have a good working knowledge of what loan programs are available.
Current employment
A minimum credit score of 680
Cash reserves of at least two months payments after the loan closes
Debt-to-Income ratio of less than 45% (see section on “Qualifying for a Loan”)
Three years of tax returns showing no home ownership |
