Buying your first home is such an exciting and important time of your life. It’s a big step in creating financial freedom for your future. First homes are often referred to as a “starter home” as people tend to live in the home for a shorter period of time and use the equity they gain from appreciation and paying down the mortgage towards buying their next home.
Buying your first home is not as hard as you may think. There are mortgage programs that allow for lower down payments such as FHA (as low as 3.5% of the sales price), conventional financing (as low as 3% of the sales price) and let’s NOT forget our Veterans who have VA loans with no downpayment available. Parents are family members may be allowed to gift funds towards down payment or closing costs and there are also programs with down payment assistance available. The seller might be able to contribute towards closing costs if it’s structured in the purchase and sales agreement.
You don’t need perfect credit to buy a home either. With FHA, your credit score can be as low as 500. Underwriters will look for why a credit score is lower and will evaluate how the recent credit history is for a potential homebuyer. I’ve helped people get preapproved to buy a home with mortgage lates and repos on their credit who were told they had to wait longer. It’s important to get a second opinion (or more!) if you’ve heard this from a loan officer.
The adorable home I have pictured in this post just came on the market yesterday. It’s located at 2710 Pike Street SE in Auburn, Washington and offered at $455,000. They’re reviewing offers on January 27, 2025. It is a classic “starter home” with 3 bedrooms and one bathroom and quite possibly one of the cutest starter homes I’ve seen in a long time. I have more information about this Auburn home here.
If you are considering buying a home (even if you’re just toying with the thought), I strongly recommend that you get preapproved. There should be NO cost to you for a preapproval and a preapproval will help you know exactly what you qualify for, how much your “ideal payment” will qualify you for and if there are any steps you can take now to help improve your position for when you are ready to buy a home. It’s important to be ready and fully pre-approved so that when a home becomes available, you’re in position to make a strong offer.
When I work with homebuyers, I take preapprovals a step further. Instead of a preapproval, I have my clients “pre-underwritten” with an actual underwriter. This helps give my clients an advantage over a typical preappproval that is issued by a loan officer. It also helps allow for a faster closing as we’ve already gone through underwriting and provides peace of mind as it should eliminate any surprises based on the homebuyer’s qualifications.
We also have programs that can help you make a more competitive offer, including a “cash buyer” program (available with conventional and VA financing). If you already own a home and are looking to buy your next but need to access your existing home equity, we have a great bridge loan.
Bottom line, if you’re dreaming of owning a home, let’s talk! I love working with first time homebuyers and helping them stop paying the landlords mortgage payment and start building THEIR home equity. Knowledge is power 😎
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