4 things first-time homebuyers need to know before they buy
It’s an interesting time to be a buyer in the current seller’s market – especially if you’re a first-time homebuyer. However, rest assured that you have plenty of real estate professionals in your corner, including our team.
That’s why we wanted to pass along this recent Realtor.com video about how people can start preparing to buy their first home. It’s a great watch, but we went ahead and pulled out four tips we wanted to highlight when it comes to making sure you get approved for the mortgage you want.
Check your expenses
When you are in the process of getting approved for a mortgage loan, a lender will check your credit history to see if you’ve historically had late payments. A loan officer will also consider your current debt situation before approving you for a loan. You should download and analyze your own credit report before trying to get a loan in case there are any disputable errors.
Pay your loans on time
If you have payment plans through credit cards or car loans, be sure to make those payments on time. Lenders consider late payments to be a liability and increase your interest rate. Additionally, you should not take out any additional credit cards or loans when trying to get approved for a mortgage. Increasing your debt-to-income ratio makes you seem like a risky borrower.
Connect with a mortgage lender
Instead of searching for homes and calculating payments yourself, it’s best to contact a mortgage lender. They can provide an accurate analysis of your payments, an exact figure for your down payment, and overall advice regarding if it’s a good time for you to start home shopping.
Consider how much you want to put down
When determining a down payment, you’ll want to consider how much to contribute initially. This will affect your monthly mortgage payment. It’s important to know there are many options that don’t require the traditional 20 percent down payment. (We know that’s a popular myth in real estate.) There are many different mortgage loan programs that you can choose from, but they all require different down payment amounts. An FHA loan requires a down payment that is a minimum of 3.5 percent of the purchase price, while other programs range from 3 percent to 20 percent.
A home search can be exhausting. Not only is there the actual search part, but there are plenty of hoops to jump through, too. However, we promise that it will be worth it in the end – and our team will be here ready to help you close the deal. When it comes to your title and closing needs, you can always trust us to deliver for you.