What is the first thing you need to do?
Whether you're buying your first home, refinancing, or investing in property, we're here to guide you every step of the way. Our expert team is dedicated to finding the best mortgage solutions tailored to your needs.
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The first thing you need to buy a home is financial preparation—this includes checking your credit score, saving for a down payment, and getting pre-approved for a mortgage.
If you're financing the home, getting pre-approved for a mortgage is usually the first formal step. This helps you understand how much you can afford and shows sellers that you're a serious buyer.
If you're paying in cash, then the first step would be ensuring your funds are ready and available for the purchase.
To get pre-approval, please either call 469-525-2105 or email toploanofficerkiho@gmail.com
What kind of mortgage type I can choose?
There are several types of mortgages, each designed to meet different financial needs and circumstances. Here are the most common ones:
1. Fixed-Rate Mortgage
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Interest rate remains constant for the entire loan term (e.g., 15, 20, or 30 years).
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Monthly payments remain predictable.
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Best for: Homebuyers who prefer stability in payments.
2. Adjustable-Rate Mortgage (ARM)
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Interest rate changes periodically based on market conditions.
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Typically starts with a lower rate for an initial fixed period (e.g., 5/1 ARM means a fixed rate for 5 years, then adjusts annually).
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Best for: Buyers who plan to move or refinance before the rate adjusts.
3. Government-Backed Mortgages
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FHA Loan: Insured by the Federal Housing Administration, ideal for first-time buyers with lower credit scores.
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VA Loan: Offered to veterans and active military members with no down payment required.
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USDA Loan: For rural homebuyers, often with no down payment and low-interest rates.
4. Jumbo Mortgage
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For loan amounts that exceed conventional loan limits (set by Fannie Mae and Freddie Mac).
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Requires higher credit scores and larger down payments.
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Best for: Buyers purchasing expensive homes.
5. Interest-Only Mortgage
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Borrower pays only interest for a set period (usually 5-10 years), then starts paying principal and interest.
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Best for: High-income earners expecting future financial growth.
Things to look for
How to Buy Your First Home | Money
Before starting the home-buying process, you need to be financially prepared. Here’s some info on how to suss out whether you’re ready to take the plunge.
Income and employment documentation
Your mortgage lender (which can be a brick-and-mortar bank or an online lender) will need proof that you can afford monthly mortgage payments, and will ask for documentation of stable employment and income when you apply.
Request a letter from your employer specifying your position within the company, how long you have been working there and your current salary. Most lenders prefer a work history of at least two years. For proof of income, you’ll typically be asked to submit your most recent pay stubs and W-2s. If you’re self-employed, you’ll have to submit your last two tax returns.
Credit score and history
Your credit score is one parameter lenders use to determine how risky it would be to provide you with a mortgage loan. Your score is based on a number of factors, like length of credit history and your record of on-time payments. If you’ve managed your credit well and have paid your debts on time, you should have a high credit score.
Most lenders require a credit score of at least 620, though some lenders will accept a lower one. However, the lower your credit score, the higher your interest rate will be, so it could be smart to work on improving it before trying to buy a home.
Debt-to-income ratio
Another major factor that influences your ability to obtain a loan is your debt-to-income ratio (DTI), a metric that compares how much you owe with how much you earn (calculated by dividing your total monthly expenses by your gross monthly income).
Your DTI tells your lender how much you are currently spending on paying down debt and how much you would have left over to put toward a mortgage.
The number to aim for here is 36% (the percentage represents how much of your monthly income goes toward paying all your debts plus your would-be mortgage). However, Many lenders will accept a DTI as high as 50%.
Timing
It’s crucially important to take a step back and consider if now is a good time — both personally and economically — for you to buy a home. If you’re constantly moving for work, or if high interest rates would be too much of a strain on your monthly finances, this probably isn’t the right time to become a new homeowner.
If a home purchase isn’t in the cards right away, take advantage of the extra time to improve your financial position, increase your credit score or save up for a larger down payment. All of these factors can make a home purchase easier and more affordable in the long run.
CONTACT
KIHO UHM (NMLS: 2034687)
Broker / Residential Mortgage Loan Originator
469-525-2105
Bethel Mortgage TX, LLC (NMLS: 2702670)
2550 State Highway 121 Building 1 Suite 400, Lewisville, TX 75056