Do Your Homework: The Steps in New Home Financing


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Kevin Hill REALTOR®, Luxury & Waterfront Specialist is here to guide you with the very important decision of purchasing property.

Here’s a comprehensive review of new home buyer financing options and essential things you should do when buying your first home.

New Home Buyer Financing Options

Should you need it, research down payment assistance programs that are specifically designed to help first-time buyers with their down payment. They often work with loan programs like FHA, VA, USDA, Fannie Mae, and Freddie Mac.

You may receive funds in the form of a second mortgage (often interest-free) or lump-sum grants that don’t require repayment.

First-Time Home Buyer Grants

Grants are typically given as lump-sum payments that reduce your total home-buying costs.

You can apply them toward closing fees or your down payment.

However, it’s important to note, that grants won’t cover the total purchase amount of your home.

Know Your Loan Options

FHA Loans are Insured mortgages requiring only a 3.5% down payment.

VA Loans are often no-down-payment loans for borrowers with military connections.

USDA Loans offer financing for rural properties with 0% down.

Conventional Loans – (Fannie Mae and Freddie Mac) are backed by these entities, requiring just 3% down.

Pre-qualification and understanding what you can afford is paramount – and shows sellers you’re a serious contender when looking for a new home. It won’t affect your credit score or commit you to working with a specific lender.

Research and Education

Familiarize yourself with specific first-time home buyer programs or grants available in your area. Work with a mortgage professional to explore your options and understand the best option available for your situation.

Start Saving Early

Consider both, one-time expenses and recurring bills when calculating how much you need to purchase a house. It adds up fast. Lastly, decide how much home you can comfortably afford based on your financial situation.

Check and Polish Your Credit

A good credit score is crucial for favorable loan terms. Review your credit report and address any issues.

Gather Loan Paperwork

Collect the necessary documents for the loan application process.

Get Pre Approval

Obtain a preapproval letter from a lender to strengthen your position during negotiations.

Compare Mortgage Rates and Fees

Shop around for the best rates and terms. Understand closing costs and fees associated with different loan options.

Remember, buying your first home is a significant milestone. Take advantage of available resources, seek professional advice from someone you trust, and make informed decisions to ensure a smooth home-buying experience.

With more than 39 years of real estate knowledge, an expansive list of referral businesses, and happy clientele, Kevin R. Hill of RE/MAX is committed to assisting clients in every facet of the home selling or buying experience, from first-time home buyers to seasoned long-term investors.

Ms. Hill has sold millions of dollars in real estate during her four decades of real estate service and, in 2019, was honored with the prestigious “RE/MAX Circle of Legends award,” granted to professionals with more than ten years of service and $10 million in commissions.

Call her today at 321.543.3649 or visit her portfolio of single-family homes here.