First-Time Homebuyer Seminar

Individuals who haven't owned a home in the past three years are considered a first-time homebuyer.

Credit history is important because it shows lenders how you make payments, manage credit, and handle debt.

Timely monthly payments, responsible credit management, and a clean history free of missed payments or bankruptcies signal to lenders that you're a trustworthy borrower.

However, if your credit has a few blemishes, there are loan programs available for borrowers with less-than-perfect credit.

Improving your credit score can significantly reduce interest costs on your home loan. Here's how you can improve it:

• Make small purchases with your credit card while keeping usage at 30% or less of the credit limit
• Ask for a higher credit limit to lower overall utilization
• Don't close your old credit cards, just don’t use them anymore
• Pay your bills on time and let any balance hit the statement first

Be patient; some credit blemishes can only be repaired with time.

To get pre-approved for a mortgage, you'll need:

• Last two pay stubs with year-to-date income
• W-2 forms & possible tax returns from the previous two years
• Two months of bank statements (all pages & assets)
• Other income & loan documentation showing amount and source

Contact a Mortgage Lender for assistance!

Private Mortgage Insurance (PMI), is an additional insurance policy included in a monthly mortgage payment if the down payment is less than 20% of the home's purchase price.

It is an added protection for the lender, not for the buyer. This premium is based on the risk of the loan. The riskier the loan, the higher the premium.

Earnest money is a good faith deposit when buying a home. It shows the seller that the buyer is serious about purchasing and the funds go toward the down payment at closing.

Typically ranging from $500 to $1000, it helps secure the property while inspections and financing are secured. If the deal falls through due to unforeseen issues like unfavorable inspections or loan denial, then the earnest money is returned to the buyer.

However, backing out of the purchase because you’ve changed your mind or find a house you like better means forfeiting the money.

Beyond the down payment and purchase price, closing costs cover additional fees for securing the new home. Expect to pay for:

• Loan processing fees
• Home Appraisal
• Credit report fees
• Title work
• Potential inspections
• Pre-paid homeowner's insurance (1-year)
• Reserve account (escrow) for taxes

While it might seem overwhelming initially, remember your lender is there to guide you through every step before you submit an offer.

Think of an escrow account as a savings account for the home. Included in your monthly payment each month are 1/12 of your homeowner’s insurance cost and 1/12 of your annual tax premium.

This portion of your payment is held in your escrow account so that when the tax bill comes due and the insurance comes due, these bills are paid in full from this escrow account.