Buying your first home is an exciting milestone, but the mortgage process can feel overwhelming. As a mortgage broker serving greater Atlanta, I want to ensure you feel confident and prepared every step of the way. This guide will break down what it takes to get a mortgage.
Before you start shopping for a home, take a close look at your finances. Lenders will evaluate your financial health based on:
Credit Score: A higher score improves your mortgage options. Did you know that there are many different versions of your credit score? Currently for mortgages, we are using FICO 2, 4 and 5. So the score you see in your banking app, or CreditKarma, is likely not the same score a mortgage lender will use. (You can check your own FICO 2, 4 and 5 credit scores with a soft pull here)
Debt-to-Income Ratio (DTI): Your debt to income ratio is how lenders determine your maximum monthly payment.This is a simple calculation where we'll divide your total monthly debt obligations (auto loans, credit card payments, your new housing payment etc.) by your gross monthly income. Your maximum DTI is determined by a combination of your credit score, the loan program and other factors - but in most cases it will need to be less than 45% in order to be approved.
Savings: You’ll need funds for a down payment (as low as 3% for some loans, unless you are a Veteran and then it could be 0%) and closing costs. Those funds must be traceable so if you are saving cash in a coffee can or under your bed, make sure you deposit it into a bank account at least 2 months before applying for a mortgage. In many cases, you can also use a gift from a family member for your down payment and closing costs.
A mortgage pre-approval shows sellers that you’re a serious buyer and helps you understand how much you can afford. As a mortgage broker, I can help you compare loan options from multiple lenders (many of which only lend through brokers) to find the best rates and terms available, all with only one credit pull.
What does it take to get pre-approved?
When we send your pre-approval, we'll also recommend a loan program. Here's some basic info about the most common programs:
Conventional Loans: Require a higher credit score and lower DTI but offer fast and seamless approvals. Conventional loans offer as little as 3% down for first-time homebuyers and 5% down for everyone else. If you put down less than 20% you'll have to pay mortgage insurance each month in addition to your Principal and Interest.
FHA Loans: These loans are great when your credit might be a bit less strong or your DTI is higher than conventional will allow. FHA loans allow as little as 3.5% down payment. FHA loans are stricter than Conventional when it comes to property condition and they all have mortgage insurance regardless of down payment, as well as an up-front funding fee that can be financed into the loan.
VA Loans: Offered as a benefit to our brave United States Veterans, VA loans allow 0% down payment and are more flexible on DTI and credit score than many other loans. These are excellent loans and at Baril Home Lending, we love helping our Veterans.
While there are many other loan types as well, these 3 are the most common we see for First-Time Home Buyers in the Atlanta and North Georgia areas. When you receive your pre-approval, make sure you understand what loan type you got approved for and ask us any questions you may have about the loan or why we selected it.
Once pre-approved, work with a trusted real estate agent to find a home within your budget. If you are working with Baril Home Lending, you can always ask us to prepare a fee worksheet for any property you are really excited about. This will include an estimate of closing costs and monthly payment, as this can vary home to home and day to day based on a variety of factors.
Be sure you are working with a great real estate agent who will put your needs first. We know many of the best in North Georgia! Use the chat bubble in the lower right of your screen if you'd like us to connect you with an agent we trust.
When you find the right home, your agent will help you submit an offer. Call us when you submit it, so we can reach out to the listing agent to help add strength to your offering. Once accepted, you’ll move forward with your mortgage application. As your mortgage broker, I’ll guide you through:
Home appraisal
Underwriting process
Loan approval
On closing day, you’ll review and sign your loan documents, pay closing costs, and receive the keys to your new home!
Choosing a mortgage broker instead of a direct lender allows you to access a wider range of loan options and receive personalized guidance tailored to your financial goals. As a North Georgia-based mortgage broker, I specialize in helping first-time buyers in Alpharetta, Roswell, Marietta, Atlanta, and surrounding areas secure competitive mortgage rates with a smooth, stress-free process.
Ready to Start Your Homebuying Journey? If you're a first-time homebuyer in North Georgia, Atlanta, Roswell, Marietta or Alpharetta, let’s connect! Contact me today by calling or texting 770-209-2773 or schedule time here to discuss your mortgage options and take the first step toward homeownership. Don't need a call and just want to find out what you are approved for? Complete our mortgage application online here!