First-Time Homebuyer Tips

First-Time Homebuyer Tips
A community-driven, buying resource

By Cheynae McDaniel Jan 4, 2025 11:45 PM

The gallery wall. Photo credit: Person

What is a First-Time Home Buyer?

Many people don’t know that they may be considered a first-time home buyer, although they have previously purchased a home. According to HUD, a first time home buyer is considered as someone who has not owned a home within the last three years. Some other criteria include: If married, both spouses are considered first-time homebuyers and a single parent who has only owned a home with a former spouse while married.

Being aware of guidelines like these are important for someone looking to purchase a home. The most important rule is to tell yourself that you are not qualified without getting the no from the lender. Be sure to get as much information as you can about the homebuying process, before you get started. There’s no heartbreak like going through an open house and falling in love with a home, but finding that there are small details about your financial situation that make you ineligible for the loan. Especially if you have gotten all the way to the finish line.

Now, I want to share my experience and knowledge with you; whether you are just embarking on this journey for the first time, or you’re back after 3 years ready to purchase another home.

Pre-Qualification vs. Pre-Approval

Pre-Qualification

Pre-Approval
Informal Process: Prequalification is a preliminary step where a lender gives you an estimate of how much you might be able to borrow based on the financial information you provide, such as your income, assets, and debts.
No Credit Check: Typically, prequalification does not involve a credit check, so it does not affect your credit score. However, a soft credit pull is recommended for more accurate estimates.
Estimate: It provides a general idea of your borrowing capacity but is not a guarantee of a loan.

Formal Process: Preapproval is a more rigorous process where the lender verifies your financial information, including income, assets, debts, and credit history.
Credit Check Required: A credit check is performed, usually a hard pull, which can affect your credit score.
Conditional Commitment: Preapproval results in a conditional commitment from the lender for a specific loan amount, subject to final approval and property appraisal.

It's a sensible rule that says before you get a mortgage it should be checked whether you can afford it.”

— Martin Lewis, Financial Journalist

Currently available at the studio. Photo credit: Person

5 Tips for Getting Pre-Qualified

Every application tells a story. From the moment the application is started, a time-clock starts, which determines certain actions that need to be completed. Our team of skilled process and dedicated assistants work together to create a streamline experience that reflects the vision of Loan Factory. We aim to give you the best service for the best price.

Here are five tips for getting pre-qualified for a mortgage:

Check Your Credit Score: Before applying for pre-qualification, review your credit report and score. A higher credit score can improve your chances of getting pre-qualified and may help you secure better interest rates.
Gather Financial Documents: Prepare necessary financial documents such as pay stubs, tax returns, bank statements, and any other relevant financial information. This will help the lender assess your financial situation accurately.
Determine Your Budget: Understand how much you can afford by calculating your debt-to-income ratio. This will help you set realistic expectations for the loan amount you can qualify for.
Reduce Debt: Pay down existing debts to improve your debt-to-income ratio. Lenders prefer borrowers with lower debt levels, as it indicates better financial stability.
Save for a Down Payment: Having a substantial down payment can improve your chances of pre-qualification. It shows lenders that you are financially prepared and reduces the loan-to-value ratio, which can lead to better loan terms.

These tips can help you prepare for the pre-qualification process and improve your chances of securing a mortgage.

Goods for the home, by our artisans. Photo credit: Person

Resources

Agent Finder
Want to work with an agent who knows our process and can help make your experience more seamless? Search our database of real estate agents who have closed at least 1 loan with Loan Factory. Or, ask me for a recommendation to a realtor directly.

Introduction to Our Process

DPA Programs
Learn more about DPA Programs that you may be interested in.

First-Time Homebuyer Programs
Get comfortable with the process before starting the house hunt. Take a look at programs and other information to get a better idea of what to expect during the process.

1099 and Business Loan Programs
Improve your portfolio or purchase a home with non-traditional income. Learn about non-traditional options like interest-only payments and DSCR.

We invite you to join our growing community of real estate purchasers, investors and refinancers. Visit our Google Meet during Pre-Qualification Weekend hours, attend a workshop, or explore our application online.

Follow us on social media to stay updated on our latest programs, upcoming events, and special promotions from our lender partners.

Thank you for allowing me to be a part of your story. Let's accomplish some goals together! Click the link to learn more.

Upcoming events

Pre-Qualification Weekend
Saturday, January 4, 2025 · 11:00am – 5:00pm
Time zone: America/Detroit
Google Meet joining info
Video call link: https://meet.google.com/uvw-emod-qsy
Or dial: ‪(US) +1 336-790-8803‬ PIN: ‪600 531 986‬#
More phone numbers: https://tel.meet/uvw-emod-qsy?pin=2505031247184

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For any inquiries, please contact:

Cheynae McDaniel
cheynae@loanfactory.com or schedule an appointment www.buffmlo.com
youtube.com/buffmlo

By Cheynae McDaniel Jan 4, 2025 11:45 PM

What is a First-Time Home Buyer?

Pre-Qualification vs. Pre-Approval

Pre-Qualification

Pre-Approval

It's a sensible rule that says before you get a mortgage it should be checked whether you can afford it.”

— Martin Lewis, Financial Journalist

5 Tips for Getting Pre-Qualified

Resources

Agent Finder

DPA Programs

First-Time Homebuyer Programs

1099 and Business Loan Programs

Upcoming events

Share & follow

For any inquiries, please contact:

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Pre-Qualification		Pre-Approval
Informal Process: Prequalification is a preliminary step where a lender gives you an estimate of how much you might be able to borrow based on the financial information you provide, such as your income, assets, and debts. No Credit Check: Typically, prequalification does not involve a credit check, so it does not affect your credit score. However, a soft credit pull is recommended for more accurate estimates. Estimate: It provides a general idea of your borrowing capacity but is not a guarantee of a loan.		Formal Process: Preapproval is a more rigorous process where the lender verifies your financial information, including income, assets, debts, and credit history. Credit Check Required: A credit check is performed, usually a hard pull, which can affect your credit score. Conditional Commitment: Preapproval results in a conditional commitment from the lender for a specific loan amount, subject to final approval and property appraisal.