Lauren Hatmaker, LLC

NMLS #1433297

Navigating the Journey: A First-Time Home Buyer's Guide with Eugene Mortgage Brokers

Welcome to Eugene Mortgage Brokers, where we’re dedicated to helping you unlock the door to your first home. We want to help you take the first step towards building generational wealth and stability for you and your family. We understand that finances and mortgages can seem scary and mysterious. They don’t have to be. At Eugene Mortgage Brokers, we guide you through the process, and make sure you understand each step. We make it easy. The dream of homeownership in America is as old as apple pie how can a first time buyer in this day and age get into their first house? Let’s start with step 1: How to qualify?

Who Qualifies as a First-Time Home Buyer?

To qualify as a first-time home buyer, you typically need to meet certain criteria:
  1. No Previous Home Ownership: This one is easy. If you’ve never owned a home before, congratulations! You’re a first-time home buyer.
  2. IRS Definition: According to the IRS, you’re considered a first-time home buyer if you haven’t owned a principal residence within the past three years. So,  if you owned a home before but haven’t in the last three years, you may still qualify. This is particularly helpful when there are special first time home buyers tax credits, such as the current Federal administration’s “Plan to Lower Housing Costs for Working Families” which was announced on March 7, 2024. If passed in congress, there would be a $10,000 tax credit for first-time homebuyers and people who sell their starter homes…”. You can read more about the announcement here: Fact Sheet: White House Plan to Lower Housing Costs and here: CBS News Link MONEYWATCH.

How Do You Qualify as a First-Time Home Buyer?

  1. Credit Score and Credit Profile: depending on your timeline for purchase, you may choose between a soft inquiry credit pull and a hard inquiry credit pull. Your credit score will determine a lot of what you are eligible to finance. Credit scores dictate which loans you can use, the amount you are charged for the interest rate you choose, and how large of a down payment you will be required to make.
  2. Income: what is your job history and how much do you make at your job? Are you self employed? Are you paid a monthly salary or are you paid hourly? Do you get a 1099 at the end of the year? There are different ways that underwriters will calculate your income depending on the loan program you qualify to use. Underwriters and lenders want to be sure you have the ability to repay your loan and make your other monthly payment obligations.
  3. Assets Which Include Down Payment and Closing Costs: While there are programs available that offer low or even no down payment options for first-time buyers, having some savings for a down payment and closing costs can improve your chances of qualifying for a mortgage and obtaining better terms. There are special programs for first time buyers in certain circumstances. Your local non-profit housing agency, like DevNW, has access to grants and savings match programs for buyers who qualify.
Now that we’ve covered the qualifications, let’s explore who exactly can benefit from first-time home buyer programs:
  1. Young Professionals: Graduating from college, starting your career, and looking to put down roots? You’re in the right place. Many first-time home buyer programs are designed to help individuals and families just like yours take that exciting first step into homeownership. Did you know you can use your college time as an equivalent qualification as job history? That means you can graduate in June 2024, start your first job out of college, and buy your first home before you’ve received your first paycheck!
  2. Renters Ready to Buy: Tired of renting and ready to pay your own mortgage instead of your landlord’s mortgage?  You are not alone. Did you know you can use a first time home buyer loan to buy the house you are living in now if your landlord wants to sell it to you? One of my high school classmates bought the duplex he had been renting when his landlord was ready to retire. It was super easy and his new home came with a built in tenant next door to help pay his mortgage!
  3. Recently Divorced or Widowed: Life changes can bring about the need for a new home, and if you’re starting fresh on your own, first-time home buyer programs can provide valuable support and resources.

How to Buy a Home for the First Time

Now that you know you qualify as a first-time home buyer, let’s talk about how to actually buy a home:
  1. Get Pre-Approved: Before you start shopping for a home, it’s essential to know how much you can afford. Getting pre-approved for a mortgage will give you a clear idea of your budget and make you a more attractive buyer to sellers. You will need a hard inquiry for an official preapproval. Most realtors want to know you are already preapproved before they start showing you houses. Besides, who wants to fall in love with a house and then LATER find out they can’t afford the payment?
  2. Find the Right Real Estate Agent: You need to work with someone who listens to you, negotiates on your behalf, and that you can trust. You want someone who is patient and can explain everything from how to make your offer the most competitive to how to read the preliminary title report. Someone who explains the contract and protects your best interests. Someone who can remain calm in negotiations and find solutions when unusual situations occur.
  3. Home Inspection and Appraisal: Once you are under contract and you have negotiated a price and terms with your seller, it is time for a home inspection and an appraisal. These two reports serve very different purposes. The home inspection will tell you about repairs or issues that may need to be addressed now or in the future. Most first time home buyers will be buying a home that has been lived in before. Even if a house is brand new, a home inspection is a very important part of the home buying process. It gives you a neutral report that you and your real estate agent can use to negotiate with the seller’s agent and the seller. You may ask for repairs to be made before you close your purchase transaction or for the seller to contribute a credit towards your closing costs if these are future repairs or maintenance that you can schedule in the future after you have moved in. You or your realtor will schedule the home inspection. Once you have moved past repair negotiations, your lender will order the appraisal. This report compares your home to other homes, nearby, that have recently sold. This report assures you and the bank that the home is sufficient collateral for your home.
  4. Closing: This is the fun stuff! We meet at the title company and you sign your final loan documents. There is a neutral third party in an escrow agent who will explain all of the documents and give you a copy when you are done. Usually you will bring your ID and your signing fingers along with your down payment. Once you and the seller have both signed all of the official paperwork, the escrow agent will record the mortgage at the courthouse and the house will be officially yours. This usually happens the same day or the next day after signing.
At Eugene Mortgage Brokers, we love what we do and we are committed to making the home buying process as smooth and easy as possible for first-time buyers. Our team of experienced mortgage specialists is here to answer your questions, provide guidance, and present your options so that you can make the best choice for your family and to finance the American dream of home ownership. If you’re ready to take the next step, we want to move at your speed.

Here are some ways you can get started:

We love to meet with clients in our office whenever schedules allow but we can also meet by video and phone.