CCL First-Time-Buyer Guide

Issue 1: Qualification

Three of the most common questions we receive from first-timers is about cost of obtaining a loan, the down payment required, and the minimum credit guidelines.

Of all the three, the only one that we can approach giving a consistent answer to is the “cost” issue. How much do buyers pay in fees, closing costs, and out-of-pocket expenses? Assume an average of $3,000 to start, and then adjust depending on the chosen mortgage rate. (Read More)

Down payment options start at 0%, but availability shifts depending on family income, home location, and more. In our feature, we discuss the down payment guidelines for major loan programs (Read More). In another article series, we explain the cost associated with mortgage insurance, which may be assigned to loans with down payments under 20% (Read More). Lastly, we highlight the California Homebuyers Down Payment Assistance Program (CHDAP) as a helpful way for first-timers to manage down payment costs (Read More).

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Credit is another complex issue that will verify depending on the lender and buyer profile. In the first part of our feature, we discuss credit repair techniques (Read More). Then, we delve into frequently asked questions about credit and loan qualification: FICO scores, debt-to-income ratio, minimum trade lines, and more (Read More). The moral of the story: there is no one size fits all loan, so don’t self-qualify from the couch. Talk with one of our mortgage expert FOR FREE to learn about the possibilities and troubleshoot any lingering credit issues.


Beating the Competition

The second side of the coin: qualifying for a mortgage is great, but unless you are able to find a home to purchase – and beat out other buyers – you still won’t own a home.

The first thing we tell potential buyers is this: attain pre approval (not to be confused with pre qualification) so that you can waive the financing contingency (Read More). This trick can help your purchase proposal find its way to the top of the pile.

Our final two recommendations could easily be slotted into the “Part 1: Qualification” section, but we have listed them here to highlight their usefulness.

Gift giving is a misunderstood part of the lending process. In this article (Read More), we clarify what type of monetary down payment and closing cost assistance that borrowers may receive from relatives (parties not listed on the title). By bolstering your down payment offer with gift funds, you can make your purchase proposal more attractive.

Lastly, we want to specifically highlight the Mortgage Credit Certificate (Read More). This phenomenal program offers a dollar-for-dollar tax credit to reduce the income tax bill of first-time buyers. What’s more, we can roll the expected savings into the qualification process into the borrower’s income, and help him/her/them qualify for a larger home. This gives first-time buyers additional qualification flexibility.

Visit our Frequently Asked Questions page for more information, or call us at 805.543.5626 to speak to a loan officer about your options.

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