CYBER WEEK SPECIAL - Rate over 6.125%? Refi and we'll pay your fees!* Call us at 801-501-7950

Buying a Home: Basics

buying a home

Photo by Francesca Tosolini on Unsplash

So you recently decided to take the plunge and buy a house. That’s so exciting! Despite your excitement, we’re sure you have a million (and one) questions about how to get started, what kind of mortgage loan you qualify for, and how you can maximize your chances of getting the house of your dreams. If these scenarios apply to you, then you’ve come to the right place. You have questions about buying a home. City Creek Mortgage has the answers. 

Assess Your Current Financial Situation

When you’re ready to buy your first home, you’re probably going to scour all the different homes listed on real estate websites like Zillow. While this is fun, it can also be dangerous because it can cause you to fall completely head over heels for a house that’s way outside your budget. But…what is your budget, anyway? When you’re buying a house, this is the first question you have to answer. 

Depending on the type of loan you qualify for, you’ll most likely have to put down at least 3 – 3.5% as a down payment. To put this into perspective, if your dream home costs $350,000, you’ll have to put down anywhere between $10,000-$10,5000. Maybe you already have this in savings, but what if you don’t? 

This is why assessing your current financial situation and determining your budget early on is so important. Most lenders prefer that first-time homebuyers have a credit score of at least 620. While this isn’t the be-all and end-all, the better your credit score is, the better rate you’ll get. Figuring out how much money you need to save, where you can cut costs, and what you can pay off before applying for a mortgage can give you a better idea of what you can truly afford versus what you think you can afford. 

Decide What You Want Out of Your Home

Chances are you’re not just going to move into the first thing you can find. Before you start looking at potential future homes, you should consider what it is you’re looking for. Do you need a lot of space or are you okay with something small? What kind of features are you looking for in a home? Maybe it makes more sense to move into a duplex or a condominium instead of a single-family home. What kind of neighborhood do you want to move to? 

These are all factors you should be considering when looking for a new home. All of these things can affect the price, but if you’re willing to explore and keep an open mind, you can find a new home that is perfect for you and your situation.

Knowing What You Qualify For and Getting Pre-Approved

Once you determine what you want from your house and what you can truly afford, it’s time to pick a lender to find out what kind of mortgage you actually qualify for. Generally speaking, there are five types of mortgage rates that first-time homebuyers may qualify for. These include: 

  • Conventional loans: Conventional loans can either be conforming or non-conforming. Conforming loans are dictated by standards put forth by the Federal Housing Finance Agency (FHFA), whereas non-conforming loans aren’t. Non-conforming loans may be beneficial for first-time homebuyers who previously filed for bankruptcy and are looking to start over. Conventional loans typically require a minimum credit score of 620 and the ability to make a large down payment. 
  • Fixed-rate mortgages: With this kind of loan, your mortgage payment will remain the same throughout the lifespan of your loan. 
  • Adjustable-rate mortgages: Adjustable-rate mortgages operate just the opposite. Instead of having the same payment for the duration of your loan, your interest rate will fluctuate based on the housing market.
  • Government-insured loans: These loans include VA loans, which are available to active-duty military, their spouses, and veterans; USDA loans, which are geared for lower-income families and do not require a down payment; and FHA loans, which require a minimum credit score of 580. First-time homebuyers who don’t have the best credit or an available down payment are eligible for this kind of loan.
  • Jumbo loans: If you’re looking to purchase property in an expensive area such as Los Angeles or New York City, you may end up qualifying for a jumbo loan if you have a minimum credit score of 700 and significant cash assets. 

Photo by Rowan Heuvel on Unsplash

How Do You Navigate the Process of Buying a Home?

The process of buying a home can be stressful and difficult to navigate by yourself. This is where hiring a real estate agent comes in. A real estate agent takes all of the previous factors into consideration and helps you find what you’re looking for. They get your financial information and discuss with you what you’re looking for in order to find the kinds of homes you want in the price range you’re looking for. Once you find a home you want, they help you through the process of making an offer, getting approved for a loan, and helping you with any paperwork that needs to be filled out and filed.

Buying a Home? Call City Creek Mortgage Today!

If you’re in the market to buy a home, call City Creek Mortgage today at (801) 501-7950 to make an appointment. 

At City Creek Mortgage, we have a reputation for being trusted, respected, and loved for a reason. We treat you like you’re a part of the family and we are dedicated to doing the right thing by you. We provide quality and excellence in our service and we aim to make you a client for life. Don’t get your mortgage from just any lender. Get it from a company that puts you first and takes pride in being transparent about the entire process. 

Call us today at (801) 501-7950 to make an appointment and get the loan you want so you can get the home you want.

 

Get your custom rate quote in 30 seconds

See your customized rate and fee options without sharing any personal information

See Purchase Rates See Refi Rates