The Mortgage Process for First-Time Buyers

By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.

A lot of buyers are entering the real estate market again, many for the first time. So, how does the mortgage process work for first-time homebuyers?

Getting a mortgage can be one of the most frightening and daunting parts of buying your first home. With all of the options, requirements, and fine print, it’s no wonder that so many people put off the decision to buy. However, getting a mortgage doesn’t have to be a struggle. In fact, once you complete it, your confidence goes up and you find yourself wanting to see what you can buy next.

These three tips will help you understand what to expect when applying for a mortgage:

1. Understand the requirements. There are many requirements for getting a mortgage, which can vary based on location, credit history, and the type of loan. You’ll need to factor in your debt-to-income ratio, credit score, size of your loan, your available down payment, and other financial obligations.

2. Know your options. There are numerous options available when it comes to types of mortgages. There are fixed-rate mortgages, typically for 30-year terms, which have a consistent interest rate throughout the life of the loan. There are also adjustable-rate mortgages, or ARMs, which can have fluctuating interest rates based on the terms of the loan. Loans can also vary between conventional, FHA, VA, and USDA loans, which have different eligibility requirements and are targeted at different homebuyers. There is also the possibility of Refinancing a loan with a Different kind of loan later on down the line. This is typically done when a buyer starts with a higher interest rate to get their foot in the door, but can get a better rate later on.

3. Shop around. As you would when buying a car or any other major purchase, you should shop around with different lenders to find the best options and terms for you. Different lenders will have different requirements and loan terms, so you should speak to several before settling on one. In all situations, you want a lender who is friendly, helpful, and straightforward. Local is usually best, as we have such a variety of property types here, and you don’t want any last minute surprises if they are not familiar with financing that property. The right lender will also be a patient, understanding source of information for you, and works in close communication with your Realtor.

Remember, the mortgage process can be tricky for first-time homebuyers, but there are resources available to help you. If you have any questions about where to start, I have great resources that can help answer your questions and get you moving towards owning your next home! Reach out by phone or email. I look forward to talking to you!