First-Time Homebuyer Questions, Answered by an Anchorage Mortgage Broker

Q: How much do I need for a down payment?

A: As little as 3% with Conventional, 3.5% with FHA, or 0% with VA (if eligible) or USDA (if the home qualifies). Many first-time buyers are surprised they don't need 20%. We'll show you options based on your cash and goals.

Q: What credit score do I need to buy a home??

A: Minimums vary by program, usually 580-620 for FHA, 620+ for Conventional.

Higher scores get better rates and lower costs. If you're close, a few strategic moves can boost your score in 10-20 days. We can provide personalized advice based on your financial situation. The best way to set yourself up for success is to get pre-approved early so we can look at your situation and give you a plan custom fit to your needs.

Q: How much house can I afford?

A: It depends on income, debts, and down payment. We'll calculate your debt-to-income ratio and show you a realistic price range. Better to know your numbers before you fall in love with a house you can't afford. insurance). PMI is an amazing tool for homebuyers and is not something to be afraid of. We can help you explore these options based on your financial situation.

Q: What's the difference between pre-qualification and pre-approval?

A: Those terms are used interchangeably depending on the region. At the end of the day if a loan officer has reviewed your documents, credit, and income - it's what sellers and agents take seriously. Pre-approvals are completed by the following business day

Q: What documents do I need to get pre-approved?

A: Photo ID, last 30 days of pay stubs, last 2 months of bank statements, last 2 years of W-2s (and tax returns if self-employed), and we'll pull your credit. I'll give you a secure upload link and tell you exactly what's needed.

Q: Can I buy a home if I have student loans?

A: Yes. We calculate a portion of your student loan payment into your debt-to-income ratio. Income-driven repayment plans can help. We'll show you exactly how your loans affect what you can borrow.

Q: What's the monthly payment going to be?

A: It depends on price, down payment, interest rate, loan program, and whether you're paying property taxes and insurance monthly. We'll show you side-by-side options so you can pick the payment that fits your budget.

Q: What are closing costs and how much are they?

A: Closing costs cover the loan process, title, appraisal, inspections, and prepaid items like taxes and insurance. Plan on about 2% of the purchase price and 2.5% if you are an investor. Seller credits can offset some or all of this.

Q: Can the seller pay my closing costs?

A: Yes, within program limits (usually 3-6% depending on loan type). We'll structure your offer to maximize seller credits without leaving money on the table.

Q: What's PMI and do I have to pay it?

A: PMI (Private Mortgage Insurance) is required on Conventional loans with less than 20% down. It protects the lender if you default. You can avoid it with 20% down, VA loan, or certain loan structures. We'll compare options.

Q: Should I use FHA or Conventional for my first home?

A: FHA is easier on credit and down payment but has mortgage insurance for the life of the loan. Conventional can be cheaper long-term if your credit is solid. We'll price both and show you which wins.

Q: What's AHFC and should I use it?

A: AHFC (Alaska Housing Finance Corporation) is Alaska's state housing finance agency offering mortgage loans with below-market interest rates and down payment assistance specifically for Alaska residents. Now available through Slavik Lund and First Rate Financial in Anchorage. AHFC offers competitive rates and local programs that fit many first-time and repeat buyers. I'll compare your options side by side and show you if AHFC truly saves you money in your scenario.

Q: How long does it take to close on a house?

A: Average is 30-35 days from contract to keys. Pre-approval helps you move fast when you find the right house. We set a clear timeline on Day 1 and keep everyone updated.

Q: What happens after I make an offer?

A: We order the appraisal and title work, verify your insurance, and clear any remaining loan conditions. You'll know exactly what we need and when. I send updates weekly (often daily) until closing.

Q: Do I need a real estate agent?

A: Highly recommended. A good agent knows the market, negotiates on your behalf, and guides you through inspections and repairs.

Q: What if the appraisal comes in lower than my offer?

A: You have options: renegotiate the price, bring extra cash, adjust your down payment, or walk away if your contract allows. We'll guide you through the numbers and help you decide.

Q: Can I buy a fixer-upper as my first home?

A: Depends on the extent of repairs. Most loans require the home to be move-in ready. FHA 203(k) loans allow you to finance repairs, but they're more complex. We'll assess if it makes sense.

Q: What's an inspection and do I need one?

A: An inspection checks the home's condition: roof, foundation, electrical, plumbing, etc. It's not required by the lender but highly recommended. It protects you from buying a money pit.

Q: Can I use gift money for my down payment?

A: Yes, if the program allows it and we document it correctly. We'll use a gift letter and verify the transfer. I'll guide you and your donor step-by-step.

Q: What if I don't have much saved for a down payment?

A: You have options: low-down-payment programs (3-3.5%), down payment assistance, VA (0% down if eligible), or USDA (0% down if the home qualifies). We'll find a path that works.

Q: Should I pay points to lower my interest rate?

A: It depends on how long you plan to stay in the home. We'll calculate the break-even point and compare it to other uses of your cash (emergency fund, repairs, etc.). It's a cost-vs-benefit decision.

Q: What's earnest money?

A: It's a good-faith deposit (usually 1-3% of the purchase price) that shows the seller you're serious. It goes toward your down payment or closing costs at closing. If you back out for reasons outside your contract, you might lose it.

Q: Can I buy a condo as my first home?

A: Yes. Condos can be more affordable and lower-maintenance than single-family homes. The condo project must meet lender guidelines (budget, insurance, owner-occupancy). We check this early.

Q: What's the biggest mistake first-time buyers make?

A: Shopping for homes before getting pre-approved. You waste time looking at houses you can't afford or miss out because your offer isn't strong. Get your numbers first, then shop with confidence.

Q: How do I know if I'm ready to buy?

A: You need stable income, manageable debt, decent credit, and some savings for down payment and closing costs. We'll review your situation and give you a clear yes/no with a roadmap if you're not quite there yet.

Q: What's the fastest way to start?

A: Ten-minute call → same-day plan. Upload docs, and we'll issue a strong pre-approval. Then you can shop with confidence knowing exactly what you can afford.

Q: Can I buy a home in Anchorage with less-than-perfect credit?

A: Yes. FHA loans accept scores as low as 580, and some lenders will work with you in the 500s with larger down payments. Conventional loans typically want 620+, but we have options. The real question is: what's causing the lower score? Recent late payments hurt more than old issues. If you're close to a cutoff (like 615 trying to hit 620), I can show you exactly which moves will boost your score in 10-30 days. Better credit = better rate = lower monthly payment.

Q: What's the difference between approved and pre-approved?

A: Pre-approved means a lender has reviewed your credit, income, and assets and issued a letter stating how much you can borrow. It's what sellers and agents take seriously. "Approved" usually refers to final loan approval after you're under contract and the underwriter has reviewed everything in detail. Some people use "pre-qualified" to mean a rough estimate with no documentation that's not worth much. We do full pre-approvals with documentation review, usually completed within 2-3 hours of receiving your docs.