Where to start on securing a loan for your first home:

Lenders have many criteria in order for customers to qualify. One of these is that the lenders require a two year work history. The work history needs to be concurrent and of the same type of work. For example; if your job was working as a truck driver at a local business and you changed to a cashier at a local grocery store, the jobs are two different skills. Don't get me wrong, lenders do understand that you want to better yourself and get better jobs skills. So going to a skilled job and better pay, there is nothing wrong with that. Criteria number two is to have one year rent history. It must be documented by cancelled checks or money order receipts. you can not pay your rent with cash and get receipts from owner. The lender wants to see that your are paying the same time each month. The owner can not write a letter to say you paid on time. Again, they need a paper trail.

One of the many fables of purchasing a home is that you need no out of pocket money. WRONG! You will need homeowner's insurance paid for one year, if you need to have any test done on the house like water, septic, or termite, and you are also responsible for paying for an appraisal on the house. All lenders require title insurance, whether it is a purchase or a refinance which protects the buyer, making sure there are no liens, judgments, and easements against the property. These are just a few of the out of pocket expenses that can pop up.

One of the most important criteria is having good credit history. Yes, this proposes another problem. You need to establish credit either by using a credit card, school loans, and/or using a loan to purchase a car or other vehicles. you need to have a minimum of two credit lines opened for 12 months. It helps to have $5,000 limit on one of the credit lines and $500 credit line on the other.

Credit bureau's report on tax liens, bankruptcy, judgments and domestic relations, these will need  to be paid in order to purchase a home. Even if you were bankrupt, you can still buy a house.

Some other fees that most first homebuyers don't know about is that at closing you are responsible for paying your portion of the taxes for the year from the start of closing. For example: if you  purchase the house in April you are responsible for the taxes till December and the seller is responsible for the taxes from January till March. Also, a 2% transfer tax is assessed on a purchase 1% State and 1% Local. More often than not these taxes are divided by the buyer and the seller each paying 1%.

Some good news for the buyer is that the seller can help you with the closing cost. This is usually around 3% to 6% and is called a seller's assist. The seller has equity in the home which can be used to assist you with your closing cost. Some sellers are okay with this and some sellers aren't. 

Finally, if you are struggling with one or two of these criteria, there is still hope for you. There are lease to own a home options. These are contracts called either a land contract or an Article of Agreement. They are an agreement where you pay rent for one year, again with checks or money order to document your payments. The agreement is notarized and can be recorded or not recorded at the Court House. These contracts are available to buyers or sellers who are interested in this arrangement. This also will help you with your closing cost. The lenders now treat these Land Contracts or Article of Agreements as refinances, meaning at the point you can include your closing cost as long as the appraised value is their.

I have given you many things to think about,1 but remember there are new programs out there everyday. Presently, they have loans that go above the total purchase price. which I did not talk about. These programs tie you and your home up for a long time. This happens because you are borrowing more than your house is worth. The best way to decide on your options is to contact a Mortgage Broker who has many lenders and many programs available and can shop around with one credit report.

Happy Home Shopping!!!