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If you are getting ready to buy your first home in the Atlanta, GA area—or think it might be time to make your big move from home renter to homeowner—you will need to at least have a basic understanding of how mortgage loans work. Unless you are buying with all-cash, you will be applying for a home loan with a mortgage lender. This loan will fund the purchase of your new home or condo, as an Atlanta first-time home buyer.
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Here are 5 Things You Need to Know as an Atlanta First-Time Home Buyer:
The Basics of Mortgage Lending
A mortgage loan is a special type of loan. You borrow money from a mortgage lender or a bank to finance the purchase of real property (house, land, condo unit, etc.). Buying a home is likely the largest purchase you will have made in your life up to this point. It may be the biggest financial transaction you ever make—at least until you are ready to move up and buy a larger, more expensive home! You will work with a mortgage lender or mortgage broker to apply for your home loan. If you qualify, you will be able to borrow the amount you need for your home purchase.
Find the Right Mortgage Lender
It’s always smart to shop around and talk with several mortgage providers. Find someone you are comfortable working with and who will provide you with different lending options. You can approach your personal bank and see if they offer mortgage loans. You can work with a direct lender who will fund your home loan. Or, you can work with a mortgage broker, who will have access to multiple direct lenders and may be able to “shop around” on your behalf to find the best lending solution and lowest possible mortgage rate.
Get Your Finances in Order
One of the best pieces of advice we can offer is to make sure you are financially ready to buy a house. Not everyone is in the best position to make such a major transaction or borrow such a large amount (literally hundreds of thousands of dollars). Before you apply for a home loan, make sure you have a steady and healthy income situation. Work to increase your credit rating (FICO score). Pay down other high-interest debts like car loans, credit cards and student loans.
Lastly, save up as much as you can for a down payment. All of these factors will help you not only qualify for a mortgage loan, but get the lowest possible interest rate (mortgage rate). A lower mortgage rate means lower monthly mortgage payments and more buying power.
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Get Pre-Approved for Your Mortgage Loan
Atlanta has a very competitive real estate market. You may be up against multiple Atlanta first-time home buyers when you are putting offers in on properties you like. You want to show the home seller you are a serious buyer and your financing is solid. The best way to do this is to get pre-approved for your mortgage loan.
Talk with your mortgage broker or lender and go through the pre-approval steps. They will review your finances and let you know how much you are qualified to borrow. This lets you know how much house you can realistically afford. In addition, having the pre-approval letter attached to your purchase offer will give the seller more confidence in you as a legitimate buyer.
Different Atlanta First-Time Home Buyer Programs
There are numerous Atlanta first-time home buyer programs available in Atlanta. You may be able to qualify for an FHA loan, VA loan, USDA loan or a conventional home loan depending on your financial standing and other factors. For instance, VA loans are available to those with military service backgrounds and can provide lower mortgage rates and zero-down financing.
USDA loans can also offer 100% financing and zero down payments. However, they are only available in “rural” areas further outside the city. FHA loans are great for first-time buyers who may have weaker credit scores and higher existing debt, but they will require a down payment of at least 3.5%. Find a mortgage broker who is certified to offer these different lending programs and let them help you figure out which is the best solution.
If you are buying your first home in Atlanta, GA, contact Moreira Team | MortgageRight today. We are a leading local mortgage broker and we will help guide you through every step of the home loan process. We can help you explore your options and lock in the lowest possible mortgage rate. Contact us today to get started!
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