Becoming A First-Time Homeowner
Homeownership has long been the heart of the American Dream. Becoming a homeowner for the first time is valuable for many reasons. Your house is a place to plant your roots, a financial investment for your future, a stable environment and ultimately, a place to call home.
Many people don’t realize that first-time buyers represent a sizeable portion of the housing market. According to the National Association of Realtors, first-time buyers made up 34% of all homebuyers, up from 31% the previous year. The median age of first-time buyers is 33, but a first-time buyer can fall into any age group.
If you’re considering buying your first home, you might be wondering how much you’ll need for a down payment. Most people believe that you must put down 20%, but that’s far from true. The National Association of Realtors also reports that the typical down payment for a first-time buyer is 7%.
If you’re eligible for a VA or USDA home loan, a down payment is not required. Conventional loan programs allow down payments as low as 3%, and FHA loans require as little as 3.5% down. So if you’re a first-time buyer, there are loan programs available to help with your down payment.
Many first-time homebuyers also worry that their credit scores are too low to buy a home. You don’t need a perfect credit score to purchase a home. Yes, there are advantages to having a higher credit score when you buy a home – more loan options and better terms, to name a few.
But don’t assume your credit score isn’t high enough for a mortgage. A credit score of at least 620 will open up many mortgage options for you. There are even government-backed loan programs that accept scores below 620. Also, loan requirements change periodically. For example, Fannie Mae recently announced guidelines that create more opportunities for mortgage co-borrowers where one has a lower credit score than the other.
Becoming a homeowner is a big move and it’s important to work with a lender you trust. At Hamilton Home Mortgage, one of our primary goals is to help first-time buyers finance homes. Our Mortgage Loan Advisors are dedicated to offering sound advice, pre-approving buyers so they know how much they can afford, helping every buyer choose the right loan, and walking borrowers through the mortgage process from application through closing.
Working with first-time homebuyers has been extremely rewarding for us as an organization. Over the years we’ve helped many families achieve the dream of homeownership, many of whom have continued to work with us for their future home refinances and purchases through our Customer for Life program. When it comes to purchasing a home, I want you to know that you have options. I feel grateful every day that we get to help borrowers fulfill the American Dream, create wealth for their future and build lifelong memories in their new homes.