If you’re a first-time homebuyer, it’s a good idea to equip yourself with as much information about your own credit as possible. If you have had financial stumbles in the past, knowing what you’re up against and where you stand will make you more confident. Your loan officer will closely investigate your credit history and score before offering you a loan amount and interest rate.
Once you find a loan officer you like with a deal that makes you happy, you can use that person as a financial advisor during your home search. “At Third Federal, we counsel our clients to help them make the right choice. We are prepared to redirect clients if they are looking to buy a home in a price range that’s too high for them,” says Martines. “The idea is to help our clients be successful homeowners.”
Needing to repair a little bad credit is not that unusual, so don’t be embarrassed. “Often, people start getting into credit problems in college and need to work now to pay down debt and raise their scores,” she says. She suggests that potential homebuyers pay down car debt and revolving credit cards before moving on to the next step.
“Even with just 5 percent down, you can still qualify for a 30-year, fixed, conventional financing at a good interest rate,” says Martines. “That is one of the safest, no-surprise loans out there.” But she adds that saving for a larger down payment can eliminate the need to pay Private Mortgage Insurance (PMI), a monthly fee that does not apply to your principal. “If you can avoid paying PMI, do.”
This opens up a lot of opportunity for qualified buyers with little or nothing saved in advance. “These mortgages are considered mainstream mortgages,” he says, adding that they’re all available from National City and other well-known banks. If you don’t qualify for one of the special programs, check into a conventional loan for just a little more money down, usually at least 5 percent.
Koch stresses the best thing for a first-time homebuyer to do is work with a skilled loan officer who can find the right program. “And don’t be afraid to ask lots of questions,” he adds. “Make sure you understand the loan and all of its terms before you enter into any agreement.”
The market is perfect for first-time homebuyers right now — lots of housing inventory, low interest rates and good programs all add up to a buyer’s market. Find a professional loan officer you trust, get your credit together, save some money, and ask lots of questions. Soon, you can be in the starter home of your dreams. nAll About CreditFind what you need to secure a good mortgage.by Karen Fuller“Even with just 5 percent down, you can still qualify for a 30-year, fixed, conventional financing at a good interest rate. That is one of the safest, no-surprise loans out there.”
Monica Martines, spokesperson for Third Federal Savings