If you have never owned a home before – or have not had ownership interest in the last three years according to some lenders – you are considered a first-time homebuyer. Buying your first home can be a daunting task, but it does not have to be. Most lenders have special programs available for first-time buyers that allow for 100% financing. In fact, depending on your credit score you may qualify for over 100% financing so that you can finance your closing costs as well.
The most important thing when buying a home (particularly your first home) is your credit. Almost every lender has some sort of “no doc” program available; which means you do not have to document your income, assets, or employment. However, you always have to document your credit history. If you previously owned a home then you would have a mortgage history on your credit report – and if you made your payments on time this would help offset other areas of concern on your credit report. Since you are a first-time buyer you will not have a mortgage history to show the lender that you have been responsible in paying a mortgage previously. As a result, the better your credit is the better off you will be.
There are many things you will want to consider when buying your first home. The first thing you need to think about is how much can you afford each month. In addition to the cost of repaying the mortgage, you will also need consider the property taxes, the homeowner’s insurance premium, flood insurance premium (if applicable), and property or condo association dues (if applicable). These additional costs can add up quickly and take a serious bite out of the budget you set for yourself.
You should also consider the location of the property – is it somewhere that you would be happy living long-term if the market slows down and you are unable to sell? Is it large enough in case the size of your family increases? Is it close to things that are most important to you such as: your workplace, schools, shopping, entertainment, etc.?
Please use the resources available on this website to help you make an informed decision and if you have any questions along the way make sure to use the “Ask An Expert” feature.
