How to Prepare & Qualify for First Time Home Loans

Buying your first home is a big deal and maybe the largest purchase you'll make. There are first time home loan programs that make qualifying easier and offer lower and sometimes zero money down for qualified applicants.

Difficulty: Moderately Challenging

Instructions

1. 
   How Much?

   How much can you afford?
   Gather a list of all your monthly obligations, for example, car payments, student loans, credit cards, etc. Search online for mortgage calculators to help determine how much home you can afford. Mortgage-calc.com has numerous mortgage calculators you can use for free. If you qualify for less than you favor, work on paying down credit cards, that can make a difference.

2. 
   Credit Report & Scores

   Check your Credit Report & Scores.
   Order copies of your credit report and scores. You want to make sure there are no discrepancies. If there is something on your credit report that is not accurate, submit a dispute with the agency and follow through until your credit report is 100% accurate. This can make the difference of qualifying for a lower interest rate, saving you thousands of dollars.

3. 
   File Paperwork

   Have paperwork prepared.
   Start a file that will contain all your home buying paperwork and documents. When you start working with a lender, they will ask you for your current paystubs, sometimes as far back as six months. Gather your W2's and tax returns for at least the last 2 years. You will want to have all your bank and financial statements readily available as well. This is the general documentation you want to have on hand.

4. 
   Search & Compare

   First Time Home Loans- Programs
   Start researching different first time home loan programs in your state. FHA loans offer assistance to qualified applicants with lower down payments. USDA loans are government insured loans that offer 0% to qualified buyers. Search and compare. A great place to look is the officia HUD website, linked in resources.

5. 
   Get Pre-Qualified

   Get Pre-Approved.
   Once you have found the perfect program that you qualify for, you want to find a mortgage lender that offers that type of financing. Once you have, start working with them to get pre-qualified. Getting pre-qualified give you the power to be able to make an offer when a home comes on the market that you like. Some sellers won't accept an offer without an official pre-qaul letter from your lender.

6. 
   Find the Perfect Home

   Find a Realtor.
   Locate a local realtor to work with. Working with a realtor gives you an advantage. They will help you in locating the perfect home for you. Explain exactly what you are looking for and your price budget. If you are looking to buy a HUD home, you will need a qualified agent to place a bid for you.

Resources

• Local HomeBuying Programs
• Free Credit Reports & Scores
• Nolo's Essential Guide to Buying Your First Home

[gahazeleyes]

on 8/22/2009 Very good information. Thanks for sharing.