Brent D. Miller
Home Mortgage Consultant
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Buy Your First Home

Thinking about buying your first home?

We'll help you understand your financing choices so you can make informed decisions about your first home loan.

It's your first home, but it's not our first mortgage. Count on us to help you understand each stage of the process.

tip icon The My FirstHomeSM interactive learning experience can help you decide if you're ready for homeownership.

What are the benefits of homeownership for first-time buyers?Show Details

Homeownership brings many benefits. When you buy your first home, you'll become part of a community and experience the security of owning the roof over your head. Get more information about these potential benefits and others in My FirstHomeSM, an online learning experience that's helping first-time buyers like you.

As a homeowner, you may also be able to:
  • Take control: Avoid rent increases and cancelled leases while creating a home that meets your needs and tastes.
  • Build home equity: Grow your assets with the principal portion of your mortgage payments as your property value increases.
  • Get tax benefits: Deduct mortgage interest and real estate property taxes on your income tax returns. (Consult a tax advisor regarding the deductibility of interest.) .
  • Build your credit: Create a strong credit history by making on-time mortgage payments.

Gears iconAre you better off renting or buying? Calculate the costs.

What should I consider before buying a home?Show Details

Homeownership is a serious and long-term commitment: financially, geographically, emotionally, and more. For more information on benefits and responsibilities of homeowning, visit My FirstHomeSM, our interactive learning experience for first-time buyers.

Give careful thought to these factors as well:
  • Financial responsibility: You'll need to pay for utilities, maintenance, and repairs – on top of your mortgage payments, property taxes, and homeowners insurance.
  • Potential risk: Real estate often increases in value over time, but not always. Your property value can also go down.
  • Tighter ties: As a renter, you can pick up and move with short notice. When you own a home, selling it before moving on is more complicated.

Document iconFirst-Time Homebuyer? First-time homebuyer? Sign up for a free guide.
A home is probably one of the largest purchases you'll ever make. Knowing what to expect can help you make informed financial decisions.

What resources do you have for first-time buyers?Show Details

We support first-time homebuyers with a variety of resources. Our goal is sustainable homeownership – customers who buy homes and live in them successfully for years to come.
  • Educational content: We focus on helping customers understand their loan options so they can make informed financing decisions. This Learning and Planning Center gives answers to questions many first-time owners ask about the homebuying process. In addition, we offer a loan comparison tool and information about different loans and programs.
  • My FirstHomeSM: We created an interactive learning experience that helps buyers consider their readiness for homeownership and learn more about all the aspects of owning a home. Start now

What basics should I understand about home mortgage loans?Show Details

Home loans can be very complex. It's likely that you'll have several financing options, all with different features. If you get a mortgage to help buy your home, you'll repay more than you borrowed. How much you repay is determined by several factors, including your interest and loan amount. To learn more about the factors that influence loan cost, visit My FirstHomeSM, an online learning experience that's helping first-time buyers like you.
Interest rate
  • The interest rate is the percentage of your loan amount we charge you to borrow money to buy your home.
  • Interest rates are based on current market conditions, your credit score, down payment, and the type of mortgage you choose.

Discount points
  • One point equals 1% of your mortgage amount.
  • If you qualify, you may be able to pay one or more points to lower your interest rate. A lower interest rate means lower monthly mortgage payments.
  • Points are usually tax deductible. (Consult a tax advisor.)

Origination charge
  • The amount that includes all charges (other than discount points) that all loan originators (lenders and brokers) involved will receive for originating the loan.
  • This charge covers items including fees, document preparation, underwriting costs, and other expenses.

Loan term
  • Your loan term is the amount of time you have to pay off your mortgage balance.
  • Shorter loan terms typically mean higher monthly mortgage payments, but often have lower interest rates. And if you pay off your mortgage balance within a shorter term, you may pay less in total interest than with a longer-term mortgage.

Remember that interest rates only tell part of the story. The total cost of a mortgage is reflected by the interest rate, discount points, and origination charges. This total cost is known as the annual percentage rate (APR), which is typically higher than the interest rate. The APR enables you to compare mortgages of the same dollar amount by considering their total annual cost.
 What is PITI? PITI stands for the four elements that make up most mortgage payments: Principal, Interest, Taxes, and Insurance.

Your monthly mortgage payment is typically made up of four parts:

  • Principal: The part of your monthly payment that reduces the outstanding balance of your mortgage.
  • Interest: The part of your monthly payment that goes toward the cost of borrowing the money.
  • Taxes: The part of your monthly payment that goes toward property taxes charged by your local government. We typically collect a portion of these taxes in every mortgage payment and hold the funds in an escrow account for tax payments made on your behalf as they become due.
  • Insurance: The part of your monthly payment that pays for homeowners or hazard insurance, which provides protection against property damage due to wind, fire or other risks. Like taxes, insurance costs are typically collected and paid from an escrow account.
View your loan options

Depending upon your property location, property type and loan amount, you may incur other monthly or annual expenses such as mortgage insurance, flood insurance, and homeowners association fees.

How will you evaluate my mortgage application? Show Details

We review a number of factors during the mortgage application process.
  • Do you have a reliable, continuing source of income to make monthly payments?
  • Income can come from primary, second, and part-time jobs, as well as overtime, bonuses, and commissions.
  • You may use other sources of income if you want them considered for payment – including retirement or veteran's benefits, disability payments, alimony, child support, and rental or investment income – provided they can be verified as stable, reliable, and likely to continue for at least three years.

Learn more about establishing and improving your credit
Current debts and credit history:
  • Do you pay your bills, loans, credit cards and other debts on time?
  • We examine your payment habits before deciding to loan you money.
  • Your credit history and credit score are also examined prior to deciding to loan you money.
  • It's a good idea to check your credit history and correct any problems before applying.

Assets and available funds:
  • Do you have enough funds for a down payment and closing costs?
  • You may use funds from a savings account, certificate of deposit (CD), investments, and retirement fund.
  • In some cases, you may be able to use gift funds toward closing costs and all or part of the down payment.
  • In many cases you will also have to demonstrate that you have additional funds in your accounts to cover several months of mortgage, tax, and insurance payments.

The property:
  • What is the market value of the property you want to purchase?
  • We will order a property appraisal to make sure your property's value meets our underwriting requirements.

Responsible lending guidelines

We approve applications where we believe the borrower has the ability to repay the loan or line of credit according to its terms. We use two ratio-based guidelines to evaluate your ability to repay.
What is debt-to-income ratio? Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.
What is housing-to-income ratio? Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.
Debt-to-income ratio:
  • Your expected monthly mortgage payment (principal, interest, taxes, and insurance) plus your other monthly debt obligations to your gross (pre-tax) monthly income are compared.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.
Housing-expense-to-income ratio:
  • We also compare just your expected monthly mortgage payment (including taxes and insurance) to your gross monthly income.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your housing expense level at or below 28%.
How to calculate your ratios

Even if you fall within the 28%/36% rules of thumb, make certain that you feel comfortable making your monthly mortgage, insurance and tax payments and the payments on all your other monthly obligations. Homes have other costs—such as utilities, maintenance and repairs—that may not exist if you rent.

How can I get started as a first-time homebuyer?Show Details

Understanding the financial considerations that go along with purchasing a home will increase your chances for a successful start. You can also prepare by:
Creating a financial plan

Gears icon

First-time buyers

Explore homebuying with our interactive learning experience.

Estimating what you can spend
  • Calculate your monthly payment use our payment calculator to estimate payments for various mortgage amounts and interest rates
  • The total amount you need is the sum of your down payment and your closing costs
  • If you have less than 20%, you will need private mortgage insurance (PMI) which protects the lender if a borrower stops paying the mortgage.
  • Closing costs and prepaid expenses are also a necessary part of getting a mortgage.

Setting a time frame
Determine when you'd like to buy your home. Take into consideration your credit, cash flow, and savings.

How can I estimate what I might be able to borrow?Show Details

There are different ways to estimate a price range that's appropriate for you. For more information, visit My FirstHomeSM, an online learning experience that's helping first-time buyers like you.
  • A free mortgage prequalification lets you estimate how much you can borrow, based on basic financial data you provide.1
  • A preapproval letter tells a REALTOR and sellers that you've been preapproved for a specific amount based on a preliminary review of your credit information.2

Application iconBuying your first house?
Estimate how much you may be able to borrow.
 What is the difference between a prequalification and a preapproval? Prequalification provides a ballpark loan estimate with no credit check and no fee. A preapproval provides a preliminary credit review with a credit check and a fee.
A preapproval isn't a commitment to lend. A commitment is contingent on checking application information, satisfying all underwriting requirements and conditions, and getting an acceptable property appraisal and title.

Verification of this information, satisfying underwriting conditions, plus a satisfactory title search and appraisal are required for final loan approval.

Remember: Neither a preapproval nor a prequalification obligates you to borrow from Wells Fargo.

How can I benefit from a preapproval?

  • You can identify and address possible qualification problems early in the homebuying process.
  • Obtaining a PriorityBuyer® preapproval tells real estate agents and home sellers that you have been preapproved for a specific mortgage amount.2 Real estate agents and sellers increasingly rely on preapproval to identify serious offers.
  • Provides an advantage over buyers who are not preapproved.
  • Adds to your negotiating strength when you are ready to make an offer on a home.
  • Lets you shop confidently because you know how much you may be able to borrow.
  • May allow for a faster closing, since much of the loan work is already completed.

First-time homebuyers can benefit from preapproval in the following ways:
  • Without a record of previous mortgage payments, a preapproval can help you feel much more confident pursuing your first home purchase.
  • A preapproval shows the seller that a lender has already run the numbers and is willing to proceed with the mortgage.

How does the process work?

  • If you're still in the early stages of house-hunting and want to know roughly about how much home you can buy, request a free mortgage prequalification.1
  • If you're ready to move forward, line up your financing ahead of time with a PriorityBuyer® preapproval, which requires a credit check and a completed mortgage application.2
  • Work with us online, over the phone, or in person with your local consultant.

Have questions or need help? Our home mortgage consultants are available to help you throughout the home financing process.

View your loan options.

How can I find a home that meets my needs?Show Details

A real estate agent can help you find properties for sale that meet your needs. Our interactive learning experience can help you identify some important factors to consider. Keep the following elements in mind as well:
  • Identify the features you want in your home with our homebuying wish list.
  • If you aren't already working with a real estate agent, your home mortgage consultant can give you information about contacting real estate agents in your area. Real estate agents make it their business to know about communities and housing options.

  • Remember that location is as important as appearance or size.
  • Think about your needs in terms of your home's location. Do you need to be in a particular school district or close to a job?
  • Although no one can predict future property values, your real estate agent can help you learn about trends in your area over the years.

Needs and wants
  • Consider desired features and amenities of a new home. For example:
    • How many bedrooms and baths do you need?
    • Do you need central heating or air conditioning?
  • Try to separate "wants" from "needs" and prioritize your list.
  • Think about ranking each item. Then look for a home with the most important features.

Types of homes
  • A single-family home is just one of your options.
  • Condominiums, town homes, and co-ops all offer different lifestyle and ownership features. Be sure to budget for monthly assessments that typically include garbage removal, landscaping, and more.
  • Consider newly built homes in addition to existing homes. Our Construction Lending Center provides financing tips and buying considerations.

Sometimes finding your ideal home involves compromise. You may want to consider "a diamond in the rough" – a place you can transform with a bit of ingenuity or some renovations. Ask a home mortgage consultant about our Purchase & Renovate SM program, which simultaneously funds purchase and repairs.

Your real estate professional and home mortgage consultant will work together to help make buying your first home a rewarding experience.

Should I use a REALTOR?Show Details

Not every real estate agent is a REALTOR® . What's the difference?

According to the NATIONAL ASSOCIATION of REALTORS®, the term REALTOR® identifies a real estate professional who is a member of the association, and who subscribes to its strict Code of Ethics. Some of the benefits of working with a REALTOR® include:
Professional assistance and representation
  • Whether you're buying or selling, a REALTOR® may be able to help you navigate the transaction more smoothly.
  • These trained professionals can make suggestions about what may seem like a complicated process.

Marketplace experience
A REALTOR® can assess the market — house-by-house, street-by-street — with access to up-to-date information that you may not have.

Buyer's advantage
A REALTOR® who understands your property and location needs can use his or her network to gather first-hand information on upcoming homes for sale.

Seller's advantage
Selling your home is a huge undertaking, especially when it comes to accurate pricing and bringing in qualified buyers. You may benefit from seeking the assistance of an experienced REALTOR®.
Your REALTOR® will be an important part of your homebuying team. To learn about the other people who will support you in buying your first home, visit our interactive learning experience.

What can I expect during the rest of the homebuying process?Show Details

Your real estate agent or REALTOR® can help you through each stage of the homebuying process. To learn more, visit My FirstHomeSM, an online learning experience that's helping first-time buyers like you.

Have a preapproval for maximum leverage
A preapproval tells real estate agents and home sellers that you've been preapproved for a specific mortgage amount. Real estate agents and sellers increasingly rely on preapproval to identify serious offers.2

Make an offer
Working with your REALTOR, determine the appropriate amount for your initial offer based on comparable home sales, market value, condition of the home, and your closing date.

Put your offer in writing
Handle all negotiations in writing to make sure both parties understand the terms of the agreement. If you do negotiate verbally, follow up in writing.

Submit a deposit
This "good faith" deposit demonstrates commitment to the transaction

Finalize your purchase contract
  • The contract is a legally binding agreement between the buyer and seller describing all the terms of the transaction. Learn more about purchase contracts.
  • Depending on your state, an attorney, real estate agent, or title company may help negotiate and draft the contract.

Next Steps

Our resources can help you understand all the stages of the home financing process
  • Educational content: Our Learning and Planning Center answers many common questions about buying your first home. We also offer a loan comparison tool and information about different loans and programs.
  • Get ready to apply: Find out what information you'll need to provide when you apply for a mortgage.
  • Track your application: Learn how you can track your application status online.

Gears iconIs buying right for you? Calculate the costs of renting versus buying.
Brent D. Miller
Home Mortgage Consultant
NMLSR ID 404017
Office: 1-425-468-8638
Fax: 1-866-746-5890
Toll Free: 1-800-643-0528 Ext.8638
Contact Us
10900 NE 8TH ST Suite 1430
Bellevue, WA 98004

Specific mortgage amount

Based on a preliminary review of your credit information.

Total the amount of your savings

How much you could put toward a new home, down payment and closing costs using:
- savings and money market accounts
- stocks and bonds
- certificates of deposit

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A prequalification lets you estimate how much you can borrow to buy a home, and is not a commitment to lend.
A PriorityBuyer® preapproval is based on our preliminary review of credit information only and is not a commitment to lend. We will be able to offer a loan commitment upon verification of application information, satisfying all underwriting requirements and conditions, and providing an acceptable property, appraisal, and title report. Preapprovals are subject to change or cancellation if a requested loan no longer meets applicable regulatory requirements. Preapprovals are not available on all products. See a home mortgage consultant for details.
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