First Time Home Buying
Are you buying your first home? Let Miller Mortgage, LLC help you.
Miller Mortgage LLC is trusted for great services and low rates. We will be help you every step along the way, from the first step of the loan process to owning your first home. Here’s a first time homebuyer guide to help you learn about the process.
Home Purchase Loan Highlights:
Loan terms up to 30 years
Fixed or variable rate options
Zero down payment
Non-profit down payment assistance allowed
Non-occupant co-borrower mortgages used to assist others in buying
Construction loans for rehab of an existing property
Gifts from relatives allowed for 3.5% down payment
No PMI mortgages up to 97% loan-to-value
Get the loan information you need, whether you’re buying:
Your first home
A second or vacation home
A foreclosure property
An investment property
A commercial property
Let us help you better understand each stage of the process through a series of Q&A.
Q: What are the benefits of homeownership for first-time buyers?
Homeownership brings many benefits. When you buy your first home, you’ll become part of a community and experience the security of owning the roof over your head. As a homeowner, you will:
Avoid rent increases and cancelled leases while creating a home that meets your needs and tastes.
Build home equity:
Grow your assets with the principal portion of your mortgage payments as your property value increases.
Get tax benefits:
Deduct mortgage interest and real estate property taxes on your income tax returns. (Consult a tax advisor regarding the deductibility of interest.)
Build your credit:
Create a strong credit history by making on-time mortgage payments.
Q: What should I consider before buying a home?
Know your Budget
Prioritize your Preferences
Target your Territory
Calculate New Property Responsibilities
Q: What resources do you have for first-time buyers?
The best resource is a good team on your side, and we can help you build that team. An expert mortgage broker and knowledgeable realtor and attorney will help tremendously. On your own, do some research: Ask your realtor questions regarding the property’s history, school system, crime rate, and transportation. Get a home inspection!
Q: What basics should I understand about home mortgage loans?
Since you are likely to be financing a loan for hundreds of thousands of dollars, it is crucial that you make a smart decision. A bad mortgage can significantly affect your finances over time. The good news is that there is a type of mortgage available for almost every situation. The bad news is that choosing the wrong one can cost you tens of thousands of dollars in interest over the term of the loan. We can help you make good financial decisions based on your situation.
The most common loans come in two styles: fixed and adjustable interest rate loans. A fixed interest loan will provide stability for you. The interest rate won’t change for the life of the loan, so your payments remain stable. One benefit with a fixed rate loan is that if interest rates go up, you continue to pay your same lower rate. On the other hand, if rates go down, you may be paying more than the current rate, although it may be possible to refinance for a lower rate. With an adjustable rate loan, you sacrifice some of the stability in payments for the ability of the mortgage to adjust with prevailing interest rates. When interest rates are going down, this is can be to your benefit. But when rates are increasing, you can find yourself with a higher monthly payment.
Q: How will you evaluate my mortgage application?
We will go over the mortgage application process with you. First, we will look at your Income, Current Debts and Credit History. What Assets and Funds are available. Finally, the property will be evaluated.
Q: How can I get started as a first-time homebuyer?
Contact Miller Mortgage, LLC for a free consultation and prequalification. We will help define a budget and time frame. Click on the Apply Now button below, call us at 877-538-7967, or email us at email@example.com.
Q: How can I estimate what I might be able to borrow?
If you have decided that buying a home is right for you, the first step is to determine what you can afford. One of the common guidelines to use is the debt-to-income ratio. Most lenders suggest that your total debt-to-income ratio should not exceed 45%, and your mortgage debt alone should be less than 36% of your monthly income.
To calculate your personal debt-to-income ratio, first add up your total monthly gross income. Once you have that figure, multiply it by 45%, or 0.45. This number is the maximum amount of monthly debt payments you should have, including your mortgage. Next, add up all of your current monthly non-mortgage debt payments and subtract it from the previous total you just calculated. This number will give you an approximate maximum mortgage payment you can afford.
Ideally, this amount should be 36% or less of your monthly income. Even with these guidelines, it is important to remember that your personal situation will ultimately dictate what you can truly afford, so take all aspects of your situation into consideration.
Q: How can I find a home that meets my needs?
Make a list of what’s important to you and your family, whether it is location, condition, price or certain amenities, and be prepared to make sacrifices. You’re not going to find the absolutely most perfect house. If you get eight of 10 things you’ve prioritized, you’ve done very well.
Q: Should I use a realtor?
If you’re looking to buy a new home, you should make sure you have a professional real estate agent on your side. A real estate agent has seen and dealt with every type of home buying situation there is and is a great asset to have. Having a buyer’s agent can take additional stress off during the home buying process. Not only do they have thorough knowledge of your new neighborhood, but they also will research and schedule home showings for you, so you have one less thing to worry about!
Q: What can I expect during the homebuying process?
Please see the following steps:
- Have a prequalification for maximum leverage
A prequalification tells real estate agents and home sellers that you have been prequalified for a specific mortgage amount. Real estate agents and sellers increasingly rely on prequalifications to identify serious offers.
- Make an offer
Working with your realtor, determine the appropriate amount for your initial offer based on comparable home sales, market value, condition of the home, and your closing date.
- Put your offer in writing
Handle all negotiations in writing to make sure both parties understand the terms of the agreement. If you do negotiate verbally, follow up in writing.
- Submit a deposit
This “good faith” deposit demonstrates commitment to the transaction.
- Finalize your purchase contract
The contract is a legally binding contract between the buyer and seller describing all the terms of the transaction. The attorney, real estate agent, or title company may help negotiate and draft the contract.
Home Buying Guide
Miller Mortgage’s Quick and Easy Guide to Homeownership
Buying your first home can be overwhelming. But, we’re here to help you. We will walk you through step by step. Below is a timeline to help you better understand the process.
First Time Home Buyers Timeline
Step 1: Gather a recent paystub and last 2 years’ W-2s (Tax return for self employed)
Being prepared is one of the most important things you can do when buying a home. Before you apply for a mortgage, we recommend that you gather all your paperwork. In doing so, this will ensure a smooth home buying and closing process. Below is a list of documents that you and your co-borrowers may need in order to complete your mortgage application.
Employment History and Income
Most recent month of paystubs
- If you get paid weekly, you will need your last five pay stubs.
- If you get paid bi-weekly, you will need your last three pay stubs.
- If you get paid monthly, you will need your last pay stub.
- Please note that pay stubs cannot be more than one month old.
Most recent 2 years of W-2’s
- Your W-2 is given to you every year by your employer so you can do your taxes. Your employer provides your W-2.
- You can find a copy of your W-2 attached to your tax return.
If self employed, completed personal and corporate tax returns with current profit and loss statement
Proof of other income (award letters for social security, retirement, pension or military retirement)
Click on our mortgage checklist for more details.
Step 2: Call Miller Mortgage, LLC to begin the free prequalification process.
Getting prequalified will give you an idea of the amount you can borrow to purchase a home. A prequalified letter can be extremely beneficial for many reasons.
Below are some advantages of getting pre-qualified.
- Help you prepare your budget.
- Help you set expectations.
- Help you strengthen your negotiation position when making an offer on a home.
With over 15 years experience, we have advice with the prequalification and budgeting process. Once you get prequalified, prepare a budget that you are comfortable with. You may get prequalified for more than you are comfortable with, but our recommendation is to stick with your budget. For example, a lot of clients enjoy going out to dinner, drinks and going on vacation. It’s important to factor in your lifestyle when creating your home purchase budget.
You might still be asking what is a prequalification? Prequalification is an estimate of the amount you can borrow to buy a home. The prequalification amount is based on your household income and assets. A lender might run a credit check at this point as well.
Please note that this process is not a pre-approval, which is a much more comprehensive process. You are NOT getting into a loan commitment at this point. A prequalification is to help you get an idea of how much you can borrow so you can prepare your budget to start the house hunting process. Understanding your price-range for a home purchase is essential to a successful house hunt.
Click on our free mortgage calculator to learn more.
Step 3: Obtain a realtor. Miller Mortgage, LLC can recommend an expert realtor.
Buying a home can be a complex process, and it will be one of the most important financial decisions you make. Working with an expert mortgage broker and realtor can help make the process a smooth one and ensure that you meet your home buying goals. We will match you with an expert realtor based on your needs. We will choose a realtor that will help you save time and effort in finding the home of your dreams within your price-range.
A great realtor will understand your wants and needs more than you. They will know a home is right for you even before you realize it.
Call Miller Mortgage, LLC @ 877-538-7967 to begin the pre-approval process.
A pre-approval is a valuable tool when shopping for a new home. To get pre-approved for a home loan you will need to provide your income and asset documentation (Paystubs, W2’s, Bank Statements, etc). A mortgage underwriter will then review your credit, mortgage application, income/asset documentation, and then approve you for a set loan amount and property value. This process typically takes a couple of days. Being pre-approved for a loan allows you to proceed with confidence, knowing that your offer will hold more weight with sellers
Step 4: Start house hunting while being mindful of non-mortgage related expenses.
The house hunting process can be a fun and exciting one. It can also be challenging and overwhelming at the same time. Here are some tips and questions to keep in mind when house hunting to ensure a smooth house hunting and home buying process.
TIP: Stay within your budget.
What type of home do you want?
- Single family, condo, townhouse?
- Old or new?
Choose a few towns/neighborhoods that meet your needs. Here are some questions to consider when choosing your towns and neighborhoods.
- Do you want to live in or close to the city? Are you more interested in suburban or rural areas?
- How far is the commute to work?
- If you work in Boston, is there a commuter rail that goes into Boston?
- What is the school system like for elementary school, middle school and high school? • Ratings are from 1-10. Ratings closer to 10 are top school systems.
- What kind of community are you interested in?
- Communities with a lot of recreational activities?
- Communities with access to restaurants and shops?
- Communities that are kid friendly?
- How much privacy do you want?
TIP: Visit these towns and neighborhoods during the day and evening, as well as during the week and weekends to get a sense of the community.
TIP: Consider the resale value. Here are features that maximize resale value: 1) Location and Safety, 2) Home Layout & Size 3) School District and 4) Curb Appeal. Educating yourself on the local market by going through these questions will help you prioritize and make a good decision on which home to purchase. Your realtor will help you with these questions.
One last piece of advice: Don’t let the perfect ruin the good.
Step 5: Make a confident offer.
In order to make a confident offer, we recommend you consider the following.
- Comps – Ask your realtor to run a home comparison report and review the prices of similar homes in the neighborhoods.
- How long has the house been on the market? Has the listing price decreased?
- How is the condition of the house?
- What can you afford based on your preapproval?
Once you feel confident in your offer amount, your realtor will help you prepare an offer letter.
TIP: Include your pre-approval letter in the offer so the seller knows you are serious about the home purchase.
Step 6: Offer accepted or countered by the seller.
The seller will either accept or counter the offer. Most likely the seller will counteroffer. If this is the case, you can work with the realtor to decide if you want to accept the counter offer or to make a new offer.
Step 7: Assuming you come to an agreement on price, get a home inspection.
Once the offer is accepted, you will need to get a home inspection. A home inspection is an assessment of the home’s condition. It typically takes about an hour and a report will be generated for you. The analysis will report whether the home is in good condition with minor or no repairs, or that the home needs major repairs. You can continue your negotiations based on the home inspection report.
TIP: We recommend that you go to the inspection. Your realtor typically goes to the home inspection as well. You can schedule a home inspection or your real estate agent can schedule one for you.
Step 8: Sign Purchase & Sale agreement – we will provide an attorney.
Once the offer has been accepted and the home inspection is completed, your attorney will create a purchase and sale agreement. A purchase and sale agreement is an agreement between both parties (you and the seller) and lays out the buyer and seller’s responsibilities during the closing time frame. In addition, the agreement will include agreements based on the home inspection report.
Review the purchase and sale agreement with your attorney. Have your realtor review the purchase and sale agreement as a third set of eyes. Once you are 100% happy and comfortable with the purchase and sale agreement, sign it. This typically occurs two weeks after the offer and home inspection.
Your lender will complete your file once the purchase and sale agreement is signed. Your lender will order home appraisal and title work. In addition, your lender will review all of your financial documents and credit report to ensure everything is up to date to verify that you still quality for the loan to purchase the home.
We work with many expert real estate attorneys and will recommend one for you when you get close to the purchase and sale agreement.
Step 9: Establish Home Owner’s Insurance – we can provide recommendations.
What is homeowner’s insurance? Homeowner’s insurance protects you from financial loss after an incident that is covered in the homeowner’s insurance.
Homeowner’s insurance typically covers the following:
- The structure of your home and other structures on your property
- Your personal assets and belongings
- Your liability for incidents in relation to your property
We can provide recommendations and further discuss with you any questions you might have when we get to this point.
Step 10: Final Walk Through before closing (sign documents to purchase).
The day before closing, you will do a final walk through to ensure the property is in good condition, specified in the purchase and sale agreement. In addition, your closing attorney will communicate with you a check amount (it has to be a certificated check) to bring with you at closing.
You’re getting so close to the home of your dreams! It’s very exciting.
Step 11: Close on your new home.
Congratulations. At closing, you will be able to review all of the closing documents, which consists of your mortgage, note and HUD statements that details the costs associated with the sale of the home. Typically, you will receive the HUD statement 24 hours before closing. This way you can review it in advance of closing. Your closing attorney will be at closing to help you with the process and answer any questions.
Once you have reviewed and signed the documents, you will become a homeowner!