The First-Time (or In a Long Time) Home Buyer Guide

As the Inside Sales Manager for The Operative Group real estate team at Eugenerealestate.com, I connect with hundreds of individuals each day who may be uncertain about how or when to begin their home-buying journey. I’ve crafted this guide specifically for you to share the realities of purchasing a home in today’s market.

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Start with Income

The biggest qualifier in obtaining a mortgage to purchase your first or next home is having a source of steady income. You do not necessarily need a high income, although that will affect the price of the home you can buy, it is more important to have a steady income. You will need tax returns for the last two years when it comes time to actually purchase. So, if you have a steady source of income (retirement, SS, Disability, etc.) or you have been at your job (same industry) for a few years; let’s talk!

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Debunking the 20% Down Payment Myth

If you’re still saving towards that 20% down payment, let me clarify:

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You do not need 20% down. This misconception holds many people back. For instance:

• VA loans: Zero down, if eligible.

• USDA: Zero down, low-income eligible on rural properties

• FHA loans: Only require 3.5% down.

• Conventional loans: Can go as low as 3-5% with solid credit and income.

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While you may need to pay mortgage insurance if your down payment is the minimum requirement, this cost is factored into your overall budget by the Lender and is manageable. In Oregon's competitive market, I often see buyers waiting years to save 20% when they might only need around 8-10% for the down payment and closing costs. Speak with a loan officer; you could be closer to homeownership than you realize.

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Next is Pre-Approval

Before you schedule home tours, reach out to me first. It’s crucial to understand your financial position before taking any steps.

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This begins with getting pre-approved. While it may sound formal and intimidating, it’s simply a brief conversation with a loan officer who will provide a quick overview of your financial situation. During this process, you'll discover:

• The amount you can actually borrow

• An estimate of what your monthly payments will be

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I always emphasize that obtaining a pre-approval is free, won't impact your credit score, and empowers you in the home-buying process. With a clear budget in mind, you enter negotiations with confidence. Additionally, sellers tend to take pre-approved offers much more seriously.

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Remember, lenders are not out to hinder you; they simply want assurance that you have a history of timely bill payments.

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