First-Time Homebuyers

Common Questions Asked by Austin First-Time Home Buyers


First Time Home Buyer MortgageAllow us to assist you through every step of the First Time Homebuying process. We know how stressful buying your first home can be, which is why we are with you from the loan application process all the way through to closing. Allow Austin Mortgage to complete the processing, underwriting, and closing with expert precision and impeccable customer service.


Why should I buy a home, instead of rent?


When you rent a home or apartment unit, you write a monthly check with no chances of ever getting your money back. A home of your own is viewed as an investment. Therefore, when you become a home owner, you can deduct the cost of your mortgage loan interest from you federal income taxes, and usually from you state taxes as well. Oddly enough, this will actually save you money each year, because the interest paid will make up most of your monthly payment for most of the years of their mortgage. Property taxes may also be deducted. Your home could also increase in value over the years. Finally, you will enjoy having something that is all yours, which is probably the greatest benefit of all.


What are “HUD homes,” and are they a good deal?


An HUD home is a 1-to-4 unit residential property obtained by the U.S. Department of Housing and Urban Development, or HUD, as a result of a foreclosure action on an FHA-insured mortgage. The HUD then takes ownership of the home, and sells it at market value as quickly as possible. Therefore, HUD homes can be a very good deal. Check out listings of HUD home as well as other homes being sold by other federal agencies on the HUD website.


Can I still qualify for a mortgage loan if I have past credit issues?


In today’s challenging economy, many people have found themselves with financial difficulties. These times create opportunities to incorporate valuable lessons into a person’s financial planning. When the desire to purchase one’s first home sets in, many often question what chances exist if they have stumbled upon financial problems in the past. Most lenders are concerned with the distinction between a person with a past bad credit experience and a person who is a bad credit risk. There is a very important difference here. Lenders’ often ask the following questions regarding credit.

  • What situation caused the financial difficulty?

  • Under what circumstances did the specific trouble fall under?

  • What steps did this person take to resolve the issue?

  • Were any measures taken to prevent the situation from reoccurring?

  • Has this person reestablished themselves financially? Were the changes made the right ones?


Are any special homeownership grants or programs offered for single parents?


There is help available. However, we do recommend getting pre-qualified for a home loan. As a single parent, you will not have the benefit of two incomes on which to qualify for a loan. By getting pre-qualified you eliminate the delay of trying to get qualified, and are aware of your overall budget when viewing homes making the home buying process much easier.


Should I use a real estate broker? How do I find one?


We do recommend using a real estate broker and we can recommend you several of Austin’s BEST real estate agents. Your first experience buying a home should be an enjoyable one. Therefore, it is a good idea to leave all of the small details involved in purchasing a home to a professional. Real estate professionals can guide you through the entire process and make the experience much easier. Real estate brokers will also be able to provide answers to questions you have regarding ideal neighborhoods, the quality of schools, overall safety of the area, traffic volume, and much more. Your agent will also help you to stay within your budget and give you immediate access to homes as soon as they’re placed on the market. Lastly, when you find the home you want to purchase, the broker can help you decide on an offer.


How much money will I need to save in order to buy my first home?


Numerous factors will affect how much money is needed to purchase a home, including the cost of the home and the type of mortgage you qualify for. Typically, there are three costs that will need to be covered. They are:

  • Earnest Money – the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to purchase the home.

  • Down Payment – a percentage of the cost of the home that you must pay when you go to settlement

  • Closing Costs – the costs associated with processing the paperwork to buy a home


How do I know if I qualify for an Austin mortgage loan?


We take pride in offering a wide array of loan products. Some of their mortgage loan options include fixed and adjustable rate FHA and VA, Jumbo loans, permanent construction financing, refinancing options, and relocation programs—just to name a few.


In addition to the mortgage payment, what other costs should I consider?


To start, you will have your monthly utilities. Your real estate broker can assist you in getting information from the seller on how much the monthly utilities normally run. You may also have homeowner association or condo association dues. Lastly, you will have property taxes. Most of the time, your taxes will be rolled into your mortgage payment. Again, your real estate broker will help you foresee these costs.


What will my mortgage cover?


Most loans have four distinct parts:

  • Principal: the repayment of the amount you actually borrowed

  • Interest: the payment to the lender for the money you’ve borrowed

  • Homeowners Insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders

  • Property Taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year


What do I need to take with me when I apply for an Austin mortgage?


We recommend bringing:

  • Social security numbers for both you and your spouse (if both are applying for the loan)

  • Copies of your checking and savings account statements for the past 6 months

  • Evidence of any other assets, such as stocks or bonds

  • A recent paycheck stub detailing your earnings

  • A list of all credit card accounts and the approximate monthly amount owed on each

  • A list of account numbers and balances on outstanding loans, such as car loans

  • Copies of your last 2 years’ income statements

  • The name and address of someone who can verify your employment


Depending on the lender you choose to use, you may be asked to bring additional documents and information.


How do I know which mortgage program is best for me?


We work with you to find a mortgage program that you are comfortable with and guides you towards your overall financial goals. We take pride in offering a wide array of loan products. Some of their mortgage loan options include fixed and adjustable rate FHA and VA, Jumbo loans, permanent construction financing, refinancing options, and relocation programs—just to name a few..


When I find the home I want, how much should I offer?


Your real estate broker can play a big role here. However, listed below are a few things to consider:

  • The prices of similar homes in the area

  • The condition of the home and the costs of any repairs needed (A proper home inspection can help you with this consideration)

  • Amount of time the home has been on the market

  • Mortgage amount required

  • How much do you want the home?


What if my offer is rejected?


Don’t panic. Initial offers usually are rejected, but don’t let that stop you. Your broker can help you negotiate the offer. Often, negotiations on price go back and forth several times before a deal is made. However, don’t lose sight of what you really want in a home and what you can actually afford.