First Time Home Buyer
Whether you’re in the middle of the buying a home or just starting out, we want to help demystified the process for you. Here’s a step-by-step task list for getting to the finish line on your first home purchase. The home-buying process isn’t something to be afraid of. It takes some perseverance, sure, but it can be completed by taking it step by step.
Why Fairway
Homebuyer Quick-Start Guide
Congratulations on your decision to become a homeowner!!
It’s quite possibly one of the most important decisions of your life. Owning a home leads to stability, the ability to build long-term wealth and a sense of pride. But you know all that. That’s why you’re here! So let’s cover some basics for you as a first-time homebuyer (without being overwhelming).
First Time Homebuyer Programs
The Federal Government defines a first time home buyer as a person who hasn’t owned a home within the last 3-years, or ever. Owning a home opens doors to personal, financial, and family freedom. The decision to buy a home, however, can be pretty stressful. We understand! We promise to use plain terms to explain everything: no special terminology, no confusing terms.
There are only three simple steps to determining your eligibility: Credit Analysis, Document Review, Loan Program Determination. These steps can all be completed using your phone in as little as a few hours!
Low or No Down Payment Options
- There are first time home buyer programs offered through the Ohio Housing Finance Agency that provide assistance with down payment or the benefit of a lower than market interest rate.
- The US Department of Agriculture also offers a Single Family Housing Loan that is $0 down, 30-year fixed rate mortgage to individuals who don’t currently own a home.
- Our goal is to educate! The majority of the clients we help are first time home buyers. We would love the opportunity to help you with your first home purchase.
Step-By-Step Guide
Your Finances
Your first step is to create a very basic budget. Start with your income and subtract out your regular expenses: Car Payment, Insurance, Cell Phone, Credit Cards, etc. If your current rent payment includes your utilities, you’ll need to separate those out when you think about buying a home: Electric, Gas, Water & Sewer, Trash Pickup and Internet/Cable. What you will be told you can afford may be more than what your comfortable having for a payment, and this budget will be the most important part to knowing that answer.
Your Credit
If you use services that give you access to your credit report, that’s great news! You will be aware of what is on your credit report and if the items listed are accurate or not.
You do need to know that the credit score a Mortgage Lender sees will be different than the credit score you see. Each industry has their won algorithm for how they arrive at your score. So, don’t be surprised if the score you see in your app or through your credit card is different from what you are told by a lender.
Applying For The Mortgage
- Your first step is to get a pre-approval* from a lender. This will tell you how much home you can qualify for, how much you need for down payment, and what your interest rate & term are for your loan.
- Real estate agents typically request a pre-approval from a lender so they can help you find a home in your budget.
- You don’t need anything on hand to apply. Most people can apply in 5 to 10minutes over the phone or online.
A note about speaking to a lender: As a first-time homebuyer, you might be hesitant to speak with a lender. Perhaps you’re afraid of someone taking a look at your credit report. There are options for a lender to do a ‘soft credit inquiry’ which will not impact your credit score. If this is your worry, ask if the lender can do a soft inquiry.
Keep In Mind
- You don’t need to have a loan program picked out or a down payment saved up when you start the pre-approval process.
- Your lender will examine your situation and tell you about the options you qualify for.
Home Loan Types
- Conventional loan: 3%+ down programs available
- FHA loan: 3.5% down payment, especially suited for those with lower income or credit scores
- USDA loan: 0% down payment** geared for single-family homes in rural and suburban areas
- VA loan: 0% down payment*** for those with eligible current and former U.S. military service
There are also financing options for individuals who may not qualify for one of the above 4 traditional financing options.
Assistance Programs
- Down payment and closing cost assistance is available from nearly every city, county, and state in the U.S.
Common First-Time Homebuyer Challenges
- Little or no down payment? This is okay – there may be options available to you that require no money down.
- Credit challenges? You’re not alone. We can help with this!
- Challenges in your past with employment? As long as you are back to work now, these challenges in your past should be no problem.
Finding the Home
- Once you’re pre-approved, start looking at homes.
- Work with an experienced real estate agent to help you find and view homes in your budget.
- The more homes you tour, the more you’ll know what you want.
- Create a list of must-haves and things you can compromise on.
- More on finding the right home.
Making an Offer
- It’s okay to make many offers on different homes before a seller accepts your offer.
- Eventually, your offer will be accepted by a seller.
- Agree to a certain amount of earnest money (up-front funds to show you’re serious about buying the home). Your real estate agent can advise you on the appropriate amount.
- Within a few days, pay the earnest money to the escrow company. (This will be applied to your down payment and closing costs.)
Getting an Inspection
- This is an opportunity to hire your own person to do a detailed review of the home.
- There could be thousands of dollars in repairs that are missed if you don’t have an inspection.
- After you have your inspection, you can renegotiate with the seller or request a release from your contract.
Closing the Home Purchase
- Closing your loan takes, on average, about 23-days. (You will hear most people say about 30-days)
- Work with your lender and agent to supply any needed documentation.
- The lender will order the appraisal, which helps verify the home is worth the price you’re paying.
- If doing an eClosing, wire the down payment and closing cost funds a few days before closing. Be careful.
- Call your escrow company to confirm wiring details. Wire fraud is increasing. If doing a traditional close, you may need to obtain a cashier’s check and bring it to your closing appointment.
- You’ll sign a large stack of papers a few days before the official close of the transaction. This is normal.
- Be available to supply any last-minute items through the closing date.
- Your lender will finalize the loan. The county will record the purchase and note you as the new owner.
Getting the Keys
- You’re a homeowner. Get your keys and move in!
You Have Options
Loan Products
First Time Home
Conventional Loan
FHA Program
Bridge Loan
Trade-In Mortgage™
Grant Programs
VA Loan
USDA Loan
Self-Employed Loan
DSCR Loan
Refinance Loan
Manufactures Homes
Realize Your Dreams Of Homeownership In The Buckeye State
We are dedicated to helping people realize the dream of homeownership and that mission starts right here in Ohio. From the excited first time home buyer who just found their perfect place, to the longtime homeowner ready to refinance and save, we believe every person deserves a mortgage lender who listens, advises honestly, and responds quickly. Our Salem team brings local knowledge, flexible programs, and genuine care to every single closing table.