Buying a Home for the First Time

How do you know how much house you can afford?

This is a question that every new homeowner finds themselves asking. Figuring out what you can afford before you start looking at houses is the smart thing to do. You don’t want to browse online and set your budget based on what you want in a house.

You need to talk to a lender, preferably a local lender that you can meet face to face, text when you have questions, and trust. Online lenders will bait you with low interest rates that you most likely won’t qualify for. Don’t fall for it.

You don’t have to prepare for meeting a lender, but if you have time, it is smart to make a list of your income, your debts, and your monthly expenses such as groceries, electricity, phones, and other reoccurring expenses.

Check out our page on getting pre-qualified for more details. 

Know Your Fincancing Options

You don't need to be an expert in lending, but you do need to know that there are different options for financing the home or property that you want. You can go with a government backed loan, also known as a conforming loan, such as conventional, FHA, USDA, or VA. There are specific qualifications for each loan type and some of them can only be used for certain properties. Down payment requirements and seller contributions will have different threshholds for each loan type as well. 

Banks typically offer the loan types mentioned above in addition to their own loan products. The other loan options are called non-conforming loans, meaning they don't meet the Fannie Mae and Freddi Mac standards for a home purchase. Raw land, fixer upper homes, and investment properties are all property types that a bank may have a non-conforming loan for. 

In summary, you need to meet with a lender to discuss all of the options and decide which loan type is best for you. Don't find your lender on Google. Ask us who we recommend and we will connect you with lenders we trust with our own personal finances.