Our guide for a first-time home buyer

While you are not required to have a realtor or real estate agent to purchase a home, they will be a valuable resource and assist you in the home buying process. Beyond just locating available homes within your budget, a realtor will also advise you and help you prepare an offer on the house. A good realtor will guide you through the nuances of home buying for a smoother transition.  Most real estate agents are paid by commission via the seller, so keep in mind that your realtor is likely to be free for a first-time home buyer.

In order to determine how much you can afford to spend on a house, you and your lender will look at your debt-to-income (DTI) ratio. If your ratio of debt per income is too high, you are more likely to not be able to make your mortgage payments and may default on your loan. Your debt-to-income ratio is calculated by adding up monthly payments (such as student loans, rent, credit card payments) and dividing this sum by your pre-tax income. The number you calculate is your percentage of debt to income. Ideally, loan applicants will have a percentage of less than 50% (0.5).  If your number is on the higher end, consider options to pay down some of that debt and how a mortgage payment will affect your budget before applying.

Are you curious what your home mortgage interest rates might look like today? Click below for a link to our Home Mortgage Calculator.

You will also need a good credit score to qualify for your first home loan.

Are you still trying to repair your credit but not sure where to start? We can help walk you through the process of repairing your credit to get you ready to buy your dream home soon. If your scores are not where they need to be in order to get pre-approved don't worry, we've got you covered. We offer credit repair to help you get the highest score possible in order to buy.  We are capable of conducting rapid re-scores which can boost your credit quickly.

Our Mortgage Pre-Approval services will take the complications out of the process. Our lenders will ask you some questions about your income, debts, assets, and credit history. From there, we can determine how much you can borrow so that you can start house hunting or make an offer to the home you have selected.  Whether you need help negotiating a mortgage or buying a new home, Polaris Home Funding Corporation can manage all your mortgage needs. You’ll be surprised by how easy your mortgage lending and first time home buying experience becomes once we work together — contact us and find out how our Mortgage Pre-Approval services can help.  Our experienced lenders can also assist you with any potential first-time home buyer programs or grants that you may qualify for.

Much of the house hunting process can be done online by using real estate databases like Zillow or Rocket Homes.  When selecting a home, it is helpful to already have your preapproval letter and a clear budget for your new home to narrow down the selection process and expedite it.  While viewing a potential home it is a good idea to check its plumbing, electrical system, water, trees, gutters, and foundations.  The house’s features as well as its conditions affect the home’s value.  A home inspector will be able to assist with identifying potential issues or deal breakers.

You will need to collect various documents and determine the down payment amount to put forward on the home in order to complete and process your loan and offer. Documents needed may include proof of identification (gov ID, driver’s license, passport).  Funds for the down payment, 2 Months of previous income (pay stubs, bank statements) 2 years of tax returns, bank statements or investment account statements, and potentially a recommendation letter.

The home you wish to buy is picked out, you are set up financially, now it is time to put in an offer for the house.  In this offer you include your offer amount, any contingencies, or any earnest money. It is important that you are certain you want to purchase this home before making this offer because if you were to change your mind, you may lose any earnest money payment you put toward the house’s purchase. After your offer is put forward the seller will either accept, decline, or propose a counteroffer. If the seller accepts, you can now move to closing on the house.

You will receive a document detailing everything to expect from closing relevant to your home purchase and loan agreement. All involved parties sit down for a meeting of paperwork, signatures, down payment, and any associated fees. You’ll want to bring with you your form of payment and ID. At the end of your closing meeting, you will receive the keys to your first home and be an official homeowner.