First Time Home Buyer Financing (Mortgage Loan) Requirements
As a First Time Home Buyer, in order to qualify for a mortgage loan, you must prove to your lender that you have the ability to repay it on time. You must show them that you can make the monthly payment on time.
Your lender will look at three important items to see if you meet their current loan standards. These three items are: Your INCOME. Your CREDIT SCORE & HISTORY. Your amount of DOWN PAYMENT cash.
If your income is too low, your credit score and history are too low, or you don't have enough money for the required down payment, you will most probably not be offered a loan.
If you qualify at the lower end of their current standards you may receive a loan but the interest will be higher, the fees will be higher, or your loan amount will be smaller than what you expected.
You should shop around for the best loan rate and terms you can find. There is competition among lenders and their rates change daily and qualifying standards change periodically.
See our Finance Guide page to find out How Much Can You Afford.
There are different kinds of lenders. Banks, savings banks, credit unions, hard money (equity) lenders, and private individuals are direct lenders. Mortgage companies and mortgage brokers are usually middlemen who match you up with other lenders who provide the money. Your financial and credit situation determines which type of lender will be best.
There are government and private programs that provide aid to first time home buyers. The help comes in the form of a Tax Credit from the Federal Government and Down Payment Assistance from the State of Florida, counties, and private organizations.
APPLYING FOR A LOAN (Mortgage Loan Application)
It is advantageous to become Pre-Qualified, or even better, Pre-Approved for your loan before actively looking at homes. That way you will know exactly what price range and monthly payment will fit your financial situation and budget.
In order to make application for a mortgage your lender will ask you for documentation.
1. Social Security Number or Proof of Permanent Residency (Green Card).
2. Pay Stubs from the last 2 months.
3. W-2 Forms from the last 2 years.
4. Bank Statements from the last 2 or 3 months.
5. Federal Tax Returns from the last 2 years.
6. List of Current Debts such as credit cards, car loans, student loans, installment loans, etc.
Your lender will compare this information to current loan programs and calculate how much you can borrow and what terms are best.