The Ultimate guide for first-time homebuyers: preparing your credit and finances for Pre-qualification.

Hello and welcome to the exciting journey of first-time homeownership! My name is Angie Anderson, and I am a dedicated mortgage loan originator specializing in guiding first-time homebuyers through the intricacies of purchasing their first home. With a keen focus on down payment assistance programs, I strive to make the dream of homeownership accessible and achievable for everyone.

Having spent over two decades in the Real Estate and Mortgage Industry, I have garnered a wealth of experience and knowledge that I am eager to share with you. My journey has been fueled by a passion for education, both my own and that of the clients I serve. Every day presents a new opportunity to learn and discover innovative ways to support first-time homebuyers on their path to owning a home.

I take immense pride in the work I do. Realizing the dream of homeownership is a significant milestone, and I am committed to making this process as smooth and enjoyable as possible. My approach is rooted in understanding the unique needs and circumstances of each homebuyer, ensuring personalized and comprehensive support throughout this pivotal journey.

In my career, I have witnessed firsthand the transformative impact of homeownership on individuals and families. It's not just about acquiring property; it's about laying the foundation for future stability, security, and happiness. This understanding drives my dedication to not only assist you in finding the right loan but also in empowering you with the knowledge and resources needed to make informed decisions.

As we embark on this journey together, know that you have a steadfast advocate and guide in me. My goal is to demystify the home-buying process, making it accessible and straightforward. Whether you're exploring down payment assistance options, understanding loan programs, or simply seeking advice on where to begin, I am here to help.

Thank you for considering me as your partner in homeownership. Together, we'll navigate the path to securing your first home and turning your dreams into reality.

Credit & Financial Preparation

DEPOSIT YOUR MONEY in a bank account; cash cannot be sourced or verified. Saving money at home and then depositing large amounts will leave you short at closing.

FOCUS ON SAVING; every penny counts toward your future home. Put your Starbucks Money in your savings and make coffee at home!

PAY DOWN CREDIT CARDS to improve your debt-to-income ratio. PAY OFF SMALL INSTALLMENT LOANS; getting rid of installment loans that are close to payoff will improve your debt-to-income.

REFINANCING your high-interest debts or auto loans to reduce monthly payments can be a great option AS LONG AS YOU ARE CONSULTING with your Mortgage Loan Officer on the process. New Inquiries can affect your approval.

Knowing your Credit Score:

There are min. credit score requirements. What is your credit score and what is affecting it?

CLEAN UP YOUR CREDIT by addressing any discrepancies or outstanding debts.

AVOID APPLYING FOR NEW CREDIT or making large purchases that could affect your loan approval.

ENSURE ALL PAYMENTS ARE MADE ON TIME; consistency is key in building a solid credit history.

MAKING LATE PAYMENTS or missing payments will affect your approval.

Finding the Right Loan

There are many options when it comes to being a First-Time Homebuyer.

Q: I have owned a home in the past, but I need First-Time Homeowner Program Options. What can I do?

A: If you have not owned a home in the last 3 years, you are considered a First-Time Homeowner.

Featured First-Time Homeowner Programs

MSHDA presents two First-Time Homebuyer Programs: one featuring a reduced interest rate without assistance, and the second, a Down Payment Assistance Loan. This loan offers up to $10,000 for Down Payment, Closing Costs, and Escrow. It's interest-free, and requires no payments as long as you live in the home and maintain your initial mortgage.

• Freddie Mac's Lender Grant Program - RezSource: Receive up to 2% of the sale price to use towards your down payment with Freddie Mac’s Lender Grant Program. This grant doesn't need to be repaid. *AMI Income Limits Apply

• Freddie Mac’s HomePossibe Program: A first-time homebuyer program offering a low 3% down payment. *AMI Income Limits Apply

• Fannie Mae’s HomeReady Program: Tailored for First-Time homebuyers with 3% down payment. *AMI Income Limits Apply

• FHA Loans: A more accessible loan option with credit and income flexibility and with only a 3.5% Down Payment Option.

The Pre-Approval

When it comes to buying a home, the pre-approval process is a crucial first step. As your dedicated mortgage loan officer, I am committed to crafting a thorough and solid pre-approval for you. This involves an upfront collection of employment and credit documentation, ensuring that when your realtor presents your offer, it stands on a foundation of financial reliability, significantly reducing the chances of financing-related issues derailing your home purchase.

While unforeseen issues can arise, preparing a pre-approval grounded in verified income, employment, and credit information greatly minimizes potential complications. This detailed approach not only strengthens your position as a buyer but also instills confidence in your realtor to advocate for your offer with assurance.

Starting the Pre-Approval Process:

1. Completing the Application: The initial step involves filling out the application form, which includes providing a comprehensive 2-year employment history. This history should detail the dates of Employment. Employer Names, Addresses, and Contact Numbers. Your Job Title. Whether you are paid Hourly or Salary. Payment Frequency.

I will need your Last 2 Pay stubs, the year-end pay stub (if available) from the previous year, and your W2s from the last 2 years.

2. Employment Gaps: If there have been any employment gaps in the last two years, it may be necessary to document a third year to avoid any surprises during the underwriting process. For those with multiple employers within this timeframe, providing the final pay stub from each job can aid in accurate income calculation.

3. Comprehensive Income Documentation: It's essential to provide all W-2s and 1099s from the last two years; ensuring no employer is omitted—even if the employment was brief. Post-closing, your file might be reviewed, and any omission could raise concerns of mortgage fraud.

Open Communication: Transparency is key throughout this process. As your loan officer, I encourage you to share your complete employment and financial history with me. My role is to compile and structure your information into a coherent file that can be easily understood and approved by underwriters. Leaving out details or gaps in your history can lead to denials or flags from underwriting.

Conclusion

The pre-approval process is more than just a preliminary step; it's a critical foundation for your home-buying journey. By ensuring that your pre-approval is backed by thorough documentation and verification, we set the stage for a smoother, more reliable path to homeownership. Remember, my goal is to help you navigate this process with ease and confidence, laying the groundwork for a successful and stress-free home purchase.

You are under contract!

What Happens Next?

After you've successfully put a home under contract, a new phase of the home-buying process begins, preparing for several upfront costs that are essential to move forward. Understanding and planning for these expenses early can ensure a smoother transition to homeownership, even if you're receiving down payment assistance. Here’s what you need to be prepared for:

. Earnest Deposit: This initial deposit shows your serious interest in the property and secures the contract. The amount varies and should be discussed with your Realtor. It's a critical part of the home-buying process, signaling to the seller your intent to purchase.

2. Home Inspections: While not always required by lenders, opting for home inspections is a wise decision to assess the property's condition. These inspections are paid out of pocket and upfront. Whether it’s a general inspection or specific assessments (like electrical, plumbing, or structural), the cost is an investment in your future home's safety and your peace of mind.

3. Appraisal: A crucial step in the lending process, the appraisal confirms the home's value matches the purchase price and loan amount. An appraisal is mandatory for the loan to proceed to underwriting and must be paid for upfront, typically costing between $500-$700. This ensures the lender is not providing a loan that exceeds the home's worth.

4. Foundation Inspection for Manufactured Homes: If purchasing a manufactured home, you may need a foundation inspection to ensure it meets certain standards. Like the appraisal, this fee is required upfront and ranges from $500-$650. This step is crucial for ensuring the long-term stability and compliance of your potential new home.

Fortunately, these expenses are not just out-of-pocket costs but investments in your homeownership journey. They can be credited toward your closing requirements, provided there is proper documentation. This documentation usually includes paid invoices and bank statements showing the transactions. To ensure these payments are verifiable, avoid using cash. Instead, consider obtaining a cashier's check from your bank, clearly indicating the purpose of each check in the memo line and keeping a copy for your records. This method ensures a clear, traceable path of payments, crucial for the smooth processing of your home purchase.

After the earnest deposit, satisfactory inspections, and appraisal scheduling, I'll focus on structuring your loan and gathering essential information for underwriting. This includes two months of bank statements, your government-issued ID, employer contact for employment verification, updated pay stubs, explanations for job gaps, and a two-year address history.

Once I have all the necessary details and the loan is structured, it's submitted to underwriting. The process then enters a quiet phase as we await an "Approved with Conditions" status. The completeness of your provided information influences the number of conditions we'll need to clear.

After clearing underwriting conditions, ensuring the appraisal is acceptable, and completing the lender's title work, you'll receive your Preliminary Closing Disclosure. This starts the compliance-regulated timeline to closing. Your file moves to a closer who finalizes closing figures with the title company, leading to your Final Closing Disclosure and preparing us for the closing stage.

Closing

When & How Does Closing Happen?

As we approach the final stage of closing your loan, you'll receive the final numbers from me, typically around 24 hours before the closing date. At this point, you have two options for handling the required funds: you can wire them directly to the title company or obtain a cashier's check from your bank, made payable to the title company. Rest assured, your closing time and location will be conveniently scheduled to fit your agenda.

I strive to be present at every closing to offer support and address any last-minute questions you might have. However, if circumstances prevent my attendance, you're more than welcome to call me during the closing, keep me on speakerphone, or, if needed, I'll ensure someone reliable is available to assist you. Remember, my support doesn't end with the closing of your loan. I remain at your service for any post-closing mortgage queries or future needs. Consider me your lifelong mortgage partner, committed to assisting you at every step of your homeownership journey.

Thank You for Exploring the Journey to Homeownership

I sincerely appreciate you taking the time to read through my step-by-step guide to becoming a first-time homebuyer. Embarking on the journey of purchasing your first home is a significant milestone, and I am thrilled to have had the opportunity to provide guidance and support along the way.

My goal is to empower you with the knowledge and tools necessary to navigate the home buying process with confidence. I understand that buying a home for the first time can be daunting, but I hope that my guide has helped demystify the process and brought you closer to achieving your dream of homeownership.

Remember, you're not alone on this journey. I’m here to assist you with any questions or concerns you may have and to offer further support as you take the next steps towards purchasing your first home.

Thank you for allowing me to be a part of your homebuying journey. Here's to a future where you hold the keys to your very own home!

Text or Call with your Mortgage Questions Angie Anderson MLO 616-581-6123

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3838 Camino del Rio N Suite 305, San Diego, CA 92108.

Corporate phone (888) 488-3807. For more licensing information visit: https://onetrusthomeloans.com/licensing-information/. All products are not available in all states. All options are not available on all programs. All programs are subject to borrower and property qualifications. Rates, terms and conditions are subject to change without notice. This is an Advertisement.