The Best Mortgage Loans for First Time Homebuyers

Buying your first home can be exciting and overwhelming at the same time. You’re fulfilling the American dream but at the same time, taking on the largest debt of your lifetime. 

Fortunately, there are many great mortgage loans for first time homebuyers. Here are our top choices.

FHA Loans

FHA loans used to be known as a ‘first time homebuyer’s loan.’ While today anyone can use the program, it is a great program for anyone that hasn’t owned a home before because of its flexible guidelines and low down payment requirements.

FHA loans require mortgage insurance for the life of the loan at a rate of 0.85% of the loan amount. Your insurance payment decreases each year as you pay your balance down, but you pay it for the life of the loan.

How to Qualify

• Minimum 580 credit score
• Maximum 43% – 50% debt-to-income ratio
• At least 3.5% of the purchase price as a down payment
• Stable income and employment for the last 2 years
• No recent bankruptcies
• Proof you’ll occupy the property as your primary residence

Conventional Loans

Conventional loans are reserved for borrowers with good credit, but it doesn’t have to be perfect. We’ve seen borrowers get approved with a credit score of 660 which isn’t in the ‘good credit’ range.

Conventional loans are different from FHA loans because you can cancel your Private Mortgage Insurance once you owe less than 80% of the home’s value. This means your mortgage payment will decrease once you eliminate PMI.

How to Qualify

• Minimum 660 credit score
• Maximum 36% – 43% debt-to-income ratio
• At least 3% down payment (5% if you owned a home before)
• Stable income and employment for the last 2 years
• No recent bankruptcies

VA Loans

VA loans are for veterans that served or are serving our country. This flexible mortgage program doesn’t require a down payment and has the most flexible guidelines for veterans.

The program is only for owner-occupied properties and is a great option for veterans right out of the military looking to buy their first house.

How to Qualify

• Minimum 620 credit score (this varies by lender since the VA doesn’t have a minimum credit score requirement)
• Maximum 43% – 50% debt-to-income ratio
• No down payment required
• Adequate disposable income according to your location and family size according to VA guidelines
• Stable income and employment or proof of future employment if you just got out of the military
• Proof you’ll occupy the property as your primary residence
• Certificate of Eligibility to prove you are eligible for a VA loan

Final Thoughts

If you’re a first time homebuyer, you have many mortgage options available to you. Compare your options and get quotes from at least 3 lenders. Each lender has different requirements and charges different rates and fees.

I’m happy to help you figure out which loan is right for you as well as help you find the house that’s perfect for your needs. Together we’ll make your dream of homeownership come true.

Do Real Estate Agents Lie about Other Offers?

In the competitive real estate industry today, it’s common to wonder if real estate agents lie about other offers. It may sometimes feel surreal when you hear ‘there’s a lot of interest’ in every house you look at – so are real estate agents telling the truth or stretching it to interest you?

Why Real Estate Agents Won’t Lie

Real estate agents have a lot to lose if they’re caught lying. Here are the most common reasons they won’t lie

The Moral Code of Real Estate Agents

First, know that real estate agents have an ethical code they should follow. Is it super regulated? Probably not as much as it should be since it’s hard to follow up on every real estate agent in the country.

But, reputable real estate agents won’t lie. They abide by their required ethical conduct and want what’s best for their clients.

Real Estate is all about Reputation

If a real estate agent is known as a liar in the industry or even one person calls their bluff, it could ruin their reputation. Real estate agents rely on word-of-mouth. They don’t want people telling others in the area bad things about them.

Lying just to get more offers isn’t an ethical move and anyone who’s found out doing it will likely ruin their reputation.

How to Spot a Lie

However, there are plenty of agents that will lie, but luckily there are ways to find out.

• Read through the lingo – If a sales agent tells you there’s a lot of interest in a home or he/she has many offers, ask for more information. If they don’t say we have an offer for $x or we already have an offer for the listing price, they are bluffing just to get you to act fast.
• Ask questions – You are allowed to ask the agent questions about the offer, like ‘when did you receive it?’ or ‘does it have contingencies?’ Ask as many questions as you want about it to see if he/she is lying.
• Give a lowball offer – If you don’t think there are other offers and you want the house, make a lowball offer, but one you think the seller will accept. If there aren’t any other offers, the seller may work with you or even counter offer. If there are offers, yours will be declined and you can move on.

Final Thoughts

The key to finding out if a real estate agent is lying about other offers is to work with a reputable real estate agent yourself. As the buyer, you need someone on your side that has your back.

Sure there are unscrupulous real estate agents out there that will lie just to get a home sold or to try to increase commissions. Don’t fall for it. Having a reputable agent on your side means you have a professional who can see through the lies.

If you’re ready to buy a home and want a reputable agent with you, contact me today!