How does one become a homeowner? It seems like a silly question. Buy a home! Especially in 2021, though, it’s much more complicated than it may seem, especially for a first time home buyer. Here, we address several important steps you need to take if becoming a homeowner is in your near future goals.

• Determine your budget. Come up with a realistic idea of how much you can afford to spend on a home. Take into account your debt, income, and assets, and use an online home loan calculator to give you a clearer picture. Make sure to consider the fact that the cost of home ownership includes more than just repaying your home loan. Other expenses can include taxes, insurance, and sometimes HOA fees, along with the closing costs associated with the home purchase.
• Strengthen your credit. Take a look at your credit report, so you’ll know what you’re working with. The better your credit score, the easier it will be to obtain financing. Mortgage rates are also lower for people with better credit. If you need help figuring out how to bring your score up, consider consulting with a financial advisor or a trusted brokerage like us.
• Save up a down payment. It’s advisable to save a 20 percent down payment when you’re getting ready to buy a house. If that number seems daunting, it’s ok. There are mortgages that allow you to put down a smaller amount. The benefit of a larger down payment, though, is that you’ll have a smaller monthly payment and be able to avoid paying private mortgage insurance.
• Research mortgages. For a first time home buyer, there are many different options for home loans, and a responsible lender can help you sort through them and find the best interest rate available for you. If your credit score is low, you may not be able to get a conventional mortgage, but options like FHA, VA, and USDA loans might be an option. Once you know what kind of mortgage you can get, consider the loan term you want. 30 years is standard, but if you want to pay off your mortgage earlier and don’t mind a higher payment, you might consider a 15-year mortgage.
• Get preapproved. To do this, you’ll need to provide a lender with information about your income, work history, debt, assets, and credit score. The lender will verify this information, running a hard credit check and, if you’re approved, give you a preapproval letter indicating how much you can borrow.

When you want to become a homeowner, working with a knowledgeable, experienced mortgage broker can give you a significant advantage. At First Coast Mortgage Funding, we offer creative solutions to help borrowers improve credit and overcome roadblocks when trying to secure home financing. Committed to helping people in the First Coast region buy and refinance residential properties, we specialize in every kind of property, working to provide home loans to our clients at the lowest interest rates, with the best possible service. Contact us through our website or call 904.770.5000 for more information.