Buying Your First Home

Whether you’re moving out of your dorms, your family’s home, or your apartment, buying your first home is an adventure. But as with every adventure, the road to your destination can be a daunting task, with potential obstacles and hardships in the way.

That’s why Central Bank is committed to being there every step of the way for you, from before you submit your application to the moment you walk into your front door for the first time. We’ve assembled our first time homebuyer guide to help you make a confident first step on your journey. You can also talk to one of our home loan experts for more information.

Home Buying Budget

How much home can I afford? There are many factors to consider when asking yourself that question. Your home buying budget will determine how much house you can buy and where you can buy, so it’s important to get it right from the beginning.

Borrowing and Your Down Payment

Everyone’s financial situation is different, and everyone’s homebuying experience is different. As a result, no home loan is a “one size fits all” solution. Depending on your financial situation, the amount that you need to borrow, as well as your down payment amount, will be unique to you.

As a general rule, though, our loan officers recommend that a family or individual should not spend more than two-and-a-half times their annual income on their home. For additional information, check out our home affordability calculator, which will help you determine what you can and can’t afford. And, of course, should you have any questions about what you can afford, contact us.

Account for All Costs

There are more costs to consider beyond your downpayment amount, as additional costs are part of the process. When browsing the housing market, incorporate these costs into your budget:

• Property tax—Your mortgage does not include property tax, which varies from city to city and county to county; taxes are more expensive the more expensive your home is.
• Maintenance and repairs—Unlike in most apartments, you’ll have to make repairs yourself or hire someone else to make repairs for you when you own a home. Don’t tap out your budget at the beginning only to find you can’t fix something that needs fixing later.
• Insurance—It’s vital to insure such a large asset in case of the unthinkable, and insurance costs scale with the price of your home.

Prequalification Application

Getting prequalified is an important step. When Central Bank prequalifies you, it means we have reviewed your application and approved you for a loan before you even put an offer on a home. That way, you save some time in the process. Additionally, some sellers will not sell to individuals who are not prequalified.

Mortgage Options for First Time Home Buyers

There are many different types of mortgage options and first time home buyers programs available. Each loan option has its own requirements, and depending on your financial preferences and situation, certain options may be a better choice.

• Fixed-rate mortgage—A fixed-rate mortgage comes with a consistent rate of interest that will not change throughout the duration of the loan.
• Adjustable-rate mortgage—An adjustable-rate mortgage, or ARM, carries a fluctuating interest rate that is not fixed and will adjust to market conditions throughout the life of your loan.
• FHA loans—Distributed through the Federal Housing Administration, these loans have more favorable terms than conventional loans but are more difficult to qualify for.
• VA loans—Veterans can make use of a loan option through the Department of Veterans Affairs; these loans do not require large down payments but are the most difficult to qualify for.

Apply for a First Time Buyer Mortgage Loan

At Central Bank, we love helping first time home buyers through the home buying process. Let us assist you. For more information, or to apply for a loan, simply contact us.