FIRST TIME BUYER
OVERVIEW
Gone are the days where a buyer has to have a large amount of cash for a down payment, an extensive credit history, and years of working at the same job. If you want to buy your first home, Centurion Mortgage can get you financed with no money down, even if you have a past record of credit difficulties. Afraid of the interest rate you will be charged for this leniency? Well, relax, the rates for our first time buyer program are often lower than the rates offered to established borrowers that obtain standard conventional financing. And that low rate is fixed for 30 years. If you have a limited credit history, you can still qualify for a mortgage. We have financed people that only have a 12 month rent history and 3 utility accounts (power, gas, water) paid on time for the same period. For those with prior bad credit, all we require is that you have had no 30-day late payments over the past year. Prior lates, collections, or charge-offs that are older than 12 months are okay. If you haven't pursued buying a home because you thought you couldn't get financing, then you need to call Centurion Mortgage now and let us put together a loan scenario for you. Getting prequalified for financing is easy, and best of all, it's free!
BUYING A HOME IS A LOT EASIER THAN YOU THINK
People who are considering buying their first home are usually quite intimidated by the process. They are unsure as to the best method of locating a home, the requirements for obtaining the best financing, and what steps to take to complete the overall process. In reality, purchasing a home is really not that difficult of an undertaking. The main difference between purchasing a home and any other major item is that with a home purchase, you will often involve yourself with people who specialize in assisting you with your purchase. The main parties you will encounter are the real estate agent and the mortgage loan officer. These individuals along with the behind-the-scenes players such as the closing attorney, appraiser, and termite inspector, handle the details required to consummate your transaction. As a buyer, your main duty is to provide the real estate agent with the requirements you have regarding your desired home, and to provide the loan officer with the financial information required to get you qualified for the best loan available. All of the minor details will be taken care of for you.
QUALIFY FOR FINANCING
The very first step in purchasing a home is to contact a Centurion Mortgage loan officer in order to find out what type of financing you can obtain. Until you  now your buying potential, everything else is a moot point. There is no charge for this pre-qualification service. The loan officer will analyze your credit, income, and down payment potential and provide you with the financing options available. With this information, you will then be able to search for a home that you can actually purchase. In the event it is determined that you are not yet able to purchase a home, the loan officer can let you know what steps you need to take in order to make a purchase in the future. Again, there is no charge for this service.
Many people underestimate their ability to purchase a home.
A buyer does not need to have an extensive credit history to purchase their first home. At Centurion, we can arrange financing for borrowers with no down payment even if they have a credit history that consist of nothing more than a 12 month rent history and three 12 month sources of credit, which can be items as simple as utility company references.
Even buyers with past credit problems can obtain favorable terms when purchasing their first home.
Provided a borrower has never had a bankruptcy or been in Consumer Credit Counseling, any late payments (30 days or more late) are disregarded and only the most recent 12 months is considered. Do note that any outstanding collections or judgments may have to be paid off. First-time buyers that can provide evidence of this clean 12-month history meet the credit requirements for favorable financing.
A first-time buyer does not need to have a down payment.
In fact, we can provide financing with virtually no investment at all from the buyer. We can construct your transaction whereby you need no money at all for a down payment, closing costs, or prepaid items (hazard insurance and property tax escrows).
First-time buyers are given leniency in debt-to-income ratios.
This means that an allowance is made for a segment of buyers who typically maintain a higher than average consumer debt load. Therefore, the debt ratio guidelines are relaxed when compared to conventional financing offering similar terms.
Most homes qualify for this financing.
A first time buyer does not have to purchase a home in a particular neighborhood in order to obtain the financing. The financing is simply limited to homes that are in good condition. Even some manufactured (mobile) homes qualify, provided they meet certain standards and are on a permanent foundation. There are limits on the amount of financing available for properties based on which county the property is in, but the limits are high enough so that the average first-time buyer has no problem keeping their purchase amount well below the limit. The current maximum loan amount in the Metro Atlanta area is almost $300,000, an amount well above the price most first-time buyers are wanting to go. The bottom line is that this financing is available on just about any home most first-time buyers want to purchase.
SEARCH FOR A HOME
Once your financing questions have been answered, it will be time to start looking for the home you wish to purchase. In our conversations with first-time buyers, we have discovered that there are many misconceptions held about the home buying process. Our most frequently encountered concerns are addressed below.
Will you need assistance in searching for a home?
Most buyers are best served by obtaining professional help when searching for a home. By utilizing a real estate agent, a buyer can state which features they would like to have in a home, what areas or schools they prefer, and what price range they can afford. The agent can then input this information into the multiple listing service database and retrieve information about every listed property that meets the selected parameters. From there, a buyer can drive by the properties and perform a curb appeal test on their own. After this initial preview of available properties, the agent can arrange to show the interior of the favorite properties to the buyer. This method is far more efficient than simply wandering around pulling flyers from homes at random while hoping to chance upon the right home.
As a buyer, you do not pay for real estate agent assistance.
The seller of a listed property has already agreed to pay a set commission to the agent who has listed the house. That agent in turn has agreed to pay a portion of that fee to any agent who brings a buyer for the property. Therefore, the agent who is working with the buyer is being compensated for their efforts already, so no additional fee is warranted. Some agents will require a buyer to sign a Buyers Agreement whereby that buyer commits to working with that agent. But never let an agent charge you a fee for working with you as a buyer. At Centurion, we can hook you up with an agent that will work with you for free. All of our loan officers have agent connections, and we can set you up with a good one.
It is best to work with one agent only.
By having only one contact, you will have an agent who will have sufficient opportunity to get to know you and your particular home requirements. You will also have an agent who will reciprocate your loyalty. When working with several agents, they are all ultimately pulling information from the same pool of listed properties, so no advantage is obtained by utilizing this method.
Avoid working directly with the listing agent.
Buyers who call the agent who has listed the home (the agent on the sign), enter into a situation whereby they wind up having no aggressive representation at the negotiating table. Under agency law, the listing agent has the primary duty to represent the interest of the seller. As a buyer, you need someone who is only dedicated to representing your interest, it’s as simple as that. An additional consideration is the fact that the listing agent will likely steer you toward their property so as to sell their listing themselves, thereby avoiding having to split the commission with another agent. As such, if there is a better deal available on a similar property around the corner, that listing agent is going to keep quiet in order to secure the sale of their own listed property. A buyer’s agent sees no difference in financial compensation between the properties, and since their loyalty is to you as the buyer, they are more likely to inform you of the better deal to be had around the corner.
New home subdivisions.
The same logic applies to new home subdivisions as well. Having your own agent accompany you through a new home sales center does not affect the price you will pay, but it will ensure you have a loud voice on your side when the negotiating process commences. A sales office agent representing the builder has a great many listings at stake, and as such that agent will not want to do anything that will affect their relationship with the builder. Conversely, a buyer’s agent has no relationship to maintain with any particular builder, so the buyer’s agent doesn’t mind stepping on a few toes if necessary.
SUMMARY
A first-time buyer should inquire about financing prior to looking for a home. There are loan programs available that are very friendly toward the first-time buyer, programs that require no cash investment, limited credit or past credit issues, and provide lenient debt-to income ratios.
When shopping for a home, the use of a real estate agent will help the transaction proceed more efficiently. There is no cost paid for by the buyer for using an agent.
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