June 14, 2022

6 Top Tips for Getting Your First Home Loan

A home is one of the most expensive things you will ever buy. As of January 2020, the median sales price for buying a home in the US is $306,000.

Getting a home loan and mortgage is one of the best resources for making your homeowner's dreams come true. But many of us have the wrong idea that getting a home loan is difficult. This is why many give up on their dream of buying a home without even checking if they can qualify for a loan. 

Obtaining a mortgage is straightforward for those who know the steps to follow. If you are eager to buy a home but don’t know how to finance it, keep reading for 7 great tips on getting a home loan. 

1. Do Your Research

The first tip you should follow for how to get a home loan is to do a lot of research before settling on a mortgage for your dream home. Even reading this article is a great start as finding out all you can on property financing could save you a lot of money.

Don’t limit your research to the generally available information. Check the local real estate information where your property is located as there may be financial incentives for homebuyers. You should also compare different mortgages before settling on one.

Some lenders may give you a higher interest rate than others. Others may ask you to buy costly insurance. Shop around for the best prices and terms and don’t be afraid to negotiate with the lenders to get the best deal. 

2. Fix Your Credit Rating 

The first thing lenders will look at when deciding whether to lend you money is your credit rating. For a conventional mortgage, lenders look for a good credit rating, which is anything between 670 to 739.

In case you decide to apply for an FHA loan, you would need a FICO score of at least 500. You can check your current FICO score for free by contacting any of the major credit check companies. If you get a bad credit score, see where you fall short and improve those areas.

For instance, you can improve your score by paying down debt and paying all your bills and monthly payments on time. In case you don’t have a credit history, you could take out a credit card and ensure you pay it in full each month. 

3. Save Up for a Down Payment

The second thing lenders will check before approving a home loan is the loan-to-value ratio (LTV). This is the figure you get when you divide the loan amount by the purchase price of the home.

The lower the LTV, the easier it will be to get a loan. This is because the lender will recover their money if you default. They would sell the property and the proceeds would cover the amount owed.

To keep your LTV down you will need to make a down payment on the house. FHA loans require a down payment of at least 3%. For conventional loans, you may need to pay anywhere between a 5 to 20% down payment. 

4. Check if You Qualify for Special Government Programs

Other than FHA and VA loans, many state and local governments have special financing programs to increase investment and homeownership. If you are a first-time home buyer, you may also be eligible for discounted homes requiring a very small or zero down payment.

Research the local property laws of the area you intend to buy a home and see if you qualify for any homeownership programs. You can also ask your local real estate agent if they know of any homeownership programs you could enjoy. 

5. Organize Your Financial Documents

You want to buy a house so you know that at some point you will need to apply for a home loan. You can reduce last-minute stress by organizing your financial documents in preparation for the loan application process. Some of the documents you will need include:

  • Your most recent pay stubs and W2 forms
  • Tax returns
  • Bank statements
  • Brokerage statements
  • Rental history

You may also need your current and previous employment contracts to prove your employment history. Keep all these documents in a special file that you can easily access when needed. Organizing your financial documents will come in handy not just when applying for a mortgage but for other financial processes like filing tax returns.

6. Decide on the Type of Mortgage

There are different types of home loans you can take out based on your financial circumstances. If you have a great credit score and a lot of savings, shop around for a conventional fixed-rate mortgage from a financial institution. These loans are less costly than other types, but they are very hard to qualify for.

If you have a low credit score and insufficient savings for a down payment, you may qualify for a Federal Housing Administration (FHA) Loan. FHA loans are great for first-time home buyers as the upfront cost is lower than that of conventional loans. But their interest rates are higher, and you will have to pay for mortgage insurance to protect your lender in case you default. 

If you are a Veteran, you can qualify for a Veterans Affairs (VA) guaranteed loan. This program allows veterans to get mortgages under favorable terms even without a down payment and with low credit scores. 

Mortgages can also have fixed interest rates or adjustable ones. If you take out a fixed-rate mortgage, the interest will remain the same throughout the mortgage term. This type of mortgage is great if you want the security of paying the same amount each month until you pay off the mortgage.

The interest rates on an adjustable mortgage change depending on market conditions or the loan agreement. Initially, the interest is quite low and you may not need to pay off the loan principal. This makes adjustable mortgages easy to afford in the first year or two until you organize your finances to pay higher amounts in the future.

Try These Tips for Getting a Home Loan 

Getting a home loan doesn’t have to be complicated. Following the above tips will make it easy for you to apply for and get a home loan. But mortgage rates and terms keep changing and new property laws are passed often, so do your research before choosing a mortgage.

If you need more information on mortgages as well as home loan advice, we can help. Get started with a secure loan process by applying online for a mortgage today.

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Based on 42 Reviews
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Emily Riesco
June 1, 2022

Brandon, Paulette, and Christie were all amazing with helping me buy my first home! Everything was done promptly and I was able to close quickly. It was overall a wonderful experience and highly recommend them! Thank you Southern Home Loans!!

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sandi breaze
April 11, 2022
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Deanna Batt
February 16, 2022

Brandon, Kristie & Ann at Southern Home Loans are the most professional and experienced team. Their organization in describing which documents or paperwork needed on our end was extremely thorough where we were able to understand what was needed to get everything submitted quickly. In turn, we were able to close early. Brandon was our Angel in getting this property. We had a seller on New Year’s Day require an approval letter. We were so stressed sharing to each other how will we get this on a holiday. We reached out to Brandon and he not only responded quickly to us, but had the letter in our hands to satisfy the seller’s realtor. In our past experiences with mortgage lenders, some good some not so, all fall short of the experience we had with Southern Home Loans. We had a partner with us that walked with us all the way and made this the best buying experience we have ever had. Our own realtor shared not only did they see their commitment to the client but they will be using them with future clients as well. We can only say from the bottom of our heart, thank you, and know others will benefit from this amazing group.Deanna Batt and Paul V. Poliseo

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Luke
February 1, 2022

Could not express enough how amazing this team is. Dave Engel was amazing and got stuff done very quick. The entire team was responsive and was happy to answer any questions I had at any time. Initially I tried using Wells Fargo and regretted it immediately. Yes their fees were lower but who cares if you can’t anything done. You truly get what you pay for. There is no question as to who you should use during this process! Thank you team!!

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Kenneth Daniels
January 6, 2022

I would like to thank Brandon and his staff at Southern Home Loans for making the mortgage process smooth and efficient. From application to funding in about 3 weeks! God Bless

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Nicole Moneymaker
August 24, 2021

Big big big shout out to Brandon and Paulett for making my fiancé‘s first experience buying a house amazing we appreciate everything that you have done for us and being so patient thank you so very much from the bottom of our heart we are so excited to have our new home❤️

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Robin Losapio
May 31, 2021

We were very pleased with southern home loans, we worked with Brandon, he was very helpful with purchasing our new home. We also worked with Paulette, who was excellent at communication and knowledge. We highly recommend them and we would definitely use them again

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Giz S.
January 3, 2021

Simply the besttttttttttttttt. Thanks so much to Brandon & Paulette that made it possible for us to purchase our first home. We appreciate all their help and great communication throughout the entire process.

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Aiza Velazquez
November 5, 2020

Brandon was awesome highly recommended him made it possible and more for home thanks Brandon and team

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Sarah Taylor
July 30, 2020

Southern Home Loans is the greatest group of people to work with specifically Brandon and Paulette. They made the loan process very easy and they were beyond helpful answered anything I asked and made sure I had everything I needed to close on the house I had my heart set on.5 star review all the way.

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justin turner
June 24, 2020

We refinanced to take advantage of low rates and Brandon’s team had us at “clear to close” in 30 days! I didn’t know it was possible. Perfect team to work with!

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Seven T
May 14, 2020

We definitely recommend this company, they made this possible! Our first house on a pandemic situation, with a great interest rate. They never said is not possible! They always looked for a way to get it done and the right way. Thanks Brandon, and Paulette for all the hard work. God bless!

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Virginia Ortiz
April 14, 2020

Brandon could not have made the process any easier! We closed two weeks early and found the home of our dreams! I am so thankful Ashley Yates with Magnolia Homestead Realty sent us to you! Highly recommended!!

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Shelly Schenck
April 9, 2020

Brandon and his team at southern home loans went absolutely above and beyond for my family we truly are so blessed with all the work Brandon did for us, there are not enough thank you's we could say. We probably drove him crazy with this whole process but he never once lost his patience with us! I would HIGHLY recommend Brandon and his team they make dreams come true! Thank you for all your hard work you did for us and making sure my family got into our home!

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Karla Franco
March 8, 2020

When I first decided to buy a house, I was extremely nervous, didnt know what to expect. But between my realtor and Southern Home Loans the experience was very smooth. There did everything possible to make sure every step was firm and looked for our best interest. They always kept in touch through phone calls and emails, always keeping us updated with every status of every step. I was always inform, therefore I fully trust them and recommend them to anybody who wants an enjoyable purchase, from the beginning until you can finally walk through the doors of your dream home. Thank You!!

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Sarah Haydu
January 29, 2020

Brandon and his team are exceptional! I wouldn’t trust anyone else to do our mortgage. They were extremely responsive and kept us updated throughout the entire process, regardless of the time or distance. Great experience and highly recommend SHL!!

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Todd Yocum
January 29, 2020

Great company. Brandon and his team will make sure to give your loan top priority and service the whole way.

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Rich M.
January 10, 2020

Brandon and his team did a great job guiding me through the home buying process. Professional, prompt, thorough and knowledgeable is how I would describe everyone at SHL. Brandon bent over backwards to get my deal done and I will be a customer for life.

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Danny Parsons
December 17, 2019

I used SHL for both of my homes and everything went smoothly. Even though I was out of town for the most recent process, they were able to get me closed before the projected closing date.

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Jon McGraw
December 16, 2019

Brandon and his team go above and beyond to get their deals to the closing table. He has closed my loan on my personal residence and I could not be happier w his team’s service. Great people and great product!!!

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Larry Smith
November 11, 2019

Big call out to Southern Home Loans, especially Brandon C.!! These guys helped us when no one else could. Highly recommended!!!

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Josh Nevelson
October 30, 2019

Knowledgeable about the industry having worked with Brandon a number of times now. Would not hesitate to work with.

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Scott Kaser
August 5, 2019

I had a great experience. Southern Home Loans had good communication throughout the process and were able to get an FHA loan on a foreclosure.

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Hope B.
May 21, 2019

As first time home buyers we had no idea what we were doing. Brandon answered all of our questions, gave good advice and helped us through the entire process. It was fast and painless. If you're serious about buying a house and in the position to do so, they will make it happen.

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Preston Garrison
November 11, 2018

I can’t say enough good things about Southern Home Loans! As first time home buyers, we had absolutely no idea where to start with this process. Brandon and his team were always there whenever we had questions, and they made our first time home buying experience go so smoothly and efficiently. We highly recommend them and we are so appreciative for all of their help.

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Joshua Stein
May 26, 2018

Very pleased with the results with this company. First time buying a home and Brandon and his team helped explain every step. Definitely recommend anyone looking to buy a house to work with this company. Everyone is pleasant and patient even with our work schedule. Thanks for making our experience so wonderful!

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Bill Agar
May 25, 2018

Brandon was very professional and efficient. He answered all my questions in a timely manner, and I truthfully felt he had my best interests in mind. I would recommend him to all of family and friends.

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Anthony Alfarone
August 8, 2017
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David Glorius
June 29, 2017

When we were looking for a house, we finally found one that met our needs...Quiet neighborhood, slow street, 5 bedrooms and a small piece of property. We finally found our dream home. We went to an old friend for a mortgage that drug us through the mud and back, and after 3 agonizing weeks of "just hold on" we couldn't get financing. Went to our bank (1 point higher interest) and they drug us through the mud and back for 2 weeks and nada...Our realtor suggested Brandon Crysler at Southern Home Loans. She called him on a Saturday, we had out paperwork over that afternoon...few more pieces of paperwork on Monday and by the end of the week, we had financing for $190,000. We closed 2 weeks later. We are so happy with My. Crysler. He came through in a pinch when two others failed! 5 *

Just closed on our house last week Annie , Brandon, and Paulette were awesome! Any calls and questions were answered promptly and professionally. I would strongly recommend.

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cecelia NARDI
May 21, 2017

This was our first time buying a house in another state. Annie, Brandon and Paulette were very helpful, and returned our phone calls promptly. We were living at a RV park with very limited computer ability. We were able to go to the office to bring over any necessary documents. Not being familiar with e-signatures Brandon helped guide us through it. Would recommend them for a loan company.

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Emily Wojcik
May 12, 2017

This was my first home and my lender was G.A. Douglas. He kept me updated on everything and was there to answer any questions that I had. lord knows I called or texted him a thousand times during the processes.He was very patient and understanding. I 100% recommend G.A. Douglas from Southern Home loans!

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Stephanie Edwards
December 5, 2016
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