July 1, 2022
What does a first-time home buyer need to know when searching for real estate to buy with an FHA mortgage? It’s good to make a checklist before you start and add to it along the way-there are some important things to do before you ever fill out home loan paperwork.
Decide If You Are Going To Use A Real Estate Agent
Whether you buy your home with an FHA mortgage or not, this is a choice that could make a difference in terms of saving time looking for just the right home. If you choose to use the services of a real estate agent, be sure to include a list of features you want in your home and features you do not want-the agent will help you narrow the field.
Get Ready To Negotiate The Sale Price Of Your Home
Many people hate the notion of haggling, negotiating, etc. But this is an important area-if you negotiate properly you could have your seller contribute up to six percent of the sale price of the home toward your closing costs.
This negotiation is important because it can free up money you would otherwise spend on closing costs and you can use that money for your down payment.
Start Saving For Your Down Payment Now
FHA home loans, like most mortgages except for VA and USDA mortgage loans, require a down payment. USDA mortgage loans are need-based, and VA mortgages are for qualifying military borrowers and certain surviving spouses only.
Your down payment funds must come from an approved source and not cash advances, payday loans, or other non-collaterlized lending.
Consider Buying A Multi-Unit Home
Even a first-time home buyer can purchase property with up to four living units with the same down payment percentage (3.5%) and basic qualifications.
Additional lender standards may apply, but a multi-unit home is a great way to purchase real estate you can grow into and even rent out as long as you are still living in the property. All FHA home loans have an occupancy requirement.
Talk To A Lender About Getting Pre-Approved For An FHA Mortgage
Get in touch with an FHA lender to discuss getting pre-approved for a home loan when you are ready to move forward in the home buying process. Pre-approval means you are a serious buyer and sellers will take you much more seriously when you go to make an offer or ask for more information.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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