Coldwell Banker Residential 26
Dawn & Dennis Martin- The Martin Team, Coldwell Banker Residential 26Phone: (303) 870-5896
Email: [email protected]

First-Time Homebuyer Tips

by Dawn & Dennis Martin- The Martin Team 11/08/2020

Photo by KML from Pexels

Buying your first home is exciting and you will spend a lot of time working with your real estate agent. However, before you begin searching for the right agent, here are some helpful hints to help you get started off on the right foot and make sure you are ready to purchase a home.

Check Your Credit Report

One of the most important things you can do before you start the home mortgage process is to verify the information on your credit report. Errors in your credit can result in higher interest rates or denial of credit. You can access your credit report free from all three major credit agencies. Review all items for accuracy and if you find any errors, take the time to have them corrected.

Familiarize Yourself with Loan Programs

There are many loan programs to help first time buyers. Depending on your specific situation, you may be eligible for a loan guarantee from the Veteran’s Administration, the Federal Housing Administration or other loan programs. Before you meet with a loan officer for the first time, take the time to understand what loan options you may qualify for. Keep in mind, many states have first-time buyer programs, which can be of benefit to you as well.

What You Should Know About Down Payments

If you suddenly hit a windfall lottery winning or are considering borrowing money on your credit cards to fund your down payment, slow down. There are specific requirements for down payments including the “seasoning” of the funds. Before you apply for a mortgage, make sure you know about down payment gifts, how to document the funds you are using for your down payment and other rules, which may pertain to your specific situation.

Understanding Mortgage Application & Loan Terms

Your home will be the most substantial investment you make in your lifetime. Make sure you are being an informed consumer and familiarize yourself with the most common mortgage application and loan terms. The application form for a home mortgage is a Fannie Mae Form 1003 or Freddie Mac Form 65. Once you have filled out this application, you will also receive a good faith estimate (GFE) from the mortgage lender. You will also be learning other words like points, annual percentage rate, closing costs and escrow. Do not be afraid to ask your lender to explain what these all mean to you.

Loans are often quoted in years and term. For example, a 30-year fixed rate mortgage is exactly what it sounds like. You are accepting or applying for a mortgage, which will be paid over 30 years at the same interest rate as you see at closing. Other terms may be more confusing, for example an adjustable-rate mortgage may be quoted as 5/5, which means the rate is fixed for the first five years and adjusts every five years thereafter. Make sure you understand these terms before you sign any loan documents.

Preapprovals Increase Bargaining Power

Once you have determined what you can afford to pay for a home mortgage, which can be determined using any number of mortgage calculators found online, you should apply for a preapproval. Do not confuse a preapproval with a prequalification, they are not the same although oftentimes you will hear them used interchangeably. Here is the difference:

  • Prequalification — this process involves you providing the lender with information pertaining to your income and current expenses. You give the lender an idea of the strength of your credit and based on information provided, they can give you an estimate of how much you can borrow at what interest rate.
  • Preapproval — this process is significantly different because you will provide the same documents you would provide for a full mortgage application. The lender will request up to three years of your tax returns, bank statements, they will pull your credit, and they will verify your bank activity. Once this process is complete, the lender will give you a letter that tells you exactly how much of a mortgage you qualify for to use when shopping for your home.

The preapproval process gives you bargaining power because you are able to meet with your real estate agent knowing that provided there are no changes in your financial situation or your credit, you are guaranteed a mortgage in the amount of the preapproval at the terms listed.

When you start the home buying process, there is a lot to learn. Most first-time buyers will be required to take a first-time home buying course before their lender will move forward. Your real estate agent can also provide you with a lot of information you will need to get started on solid footing on the path to home ownership.

About the Author
Author

Dawn & Dennis Martin- The Martin Team

A Winning Tradition Together, Dennis and Dawn Martin represent a winning tradition for home buyers and sellers throughout the Denver Metro area. Like the great Rocky Mountains themselves, this father and daughter business team continues to stand tall when it comes to providing the highest level of real estate service possible.  

Competitive, caring and fiercely committed to always going the extra mile on behalf of the people they serve, Dennis and Dawn view each client they serve as another member of there extended family. They believe great service stands the test of time, which is why they're always looking for new and better ways to improve on there already high standards.  

It's also why so much of their business comes from referrals and past clientele. Call them before your next move and put their winning traditions to work for you.  

A Fitting Partnership As native residents, Dennis and Dawn Martin are proud to be part of this rich heritage, Indeed, those who know them best will tell you they are yet another great Rocky Mountain tradition,  That's because this unique father and daughter business team have been making a positive difference in the lives of local residents throughout the Denver Metro area for several generations.  

The Martins like to refer to their service as "Hi Tech and Hi Touch. Dawn is the computer savvy entrepreneur who utilizes the very latest technology to streamline the home buying an selling process for clients,   Dennis the hands on consultant who pride himself on his extremely personal and caring service. For clients, however, it's really the best of both worlds, which is why so many people , including their kids and grandchildren, return to the Martins for all their real estate needs.  

So when you're ready to buy or sell your next home in the Denver Metro area, tap into another great Rocky Mountain tradition. Give Dennis and Dawn Martin a call. With over 50 years of local real estate experience between them they represent A Winning Tradition for home buyers and sellers alike