The first thing you should do when you are looking forward to buy a home for the first time is to call a mortgage loan officer. A mortgage loan officer will help you analyze how much you can afford. He will also tell you if your credit is in good shape or not. Recent developments and some new policies have actually made it easier for a person to buy a new home. However, due to lack of information, many people end up paying high mortgages and suffering from debts for a long part of their lives. It is just about finding the right start which helps you locate a new home and a mortgage that is not a burden.
Tips for First Time Home Buyers
1) Pre-Qualification – One should always have an idea about his borrowing potential. Moreover, this idea should be obtained before beginning to find a first time buyer mortgage. Pre-qualification gives this idea and it is usually free of cost. Pre-qualification determines a buyer’s ability to purchase a home. It also acts as leverage with most of the realtors and sellers.
2) Prove that you can pay back – The most important factor that governs if your loan would be cleared or not is your ability to pay it back. Every mortgage lender would want to know if you have sufficient assets for the down payment and closing costs. The lender would also want to make sure if your monthly salary will be able to cover the monthly mortgage payments. Salaries, bonuses, retirement benefits, disability benefits, welfare benefits, alimony etc. will strengthen your case and therefore, you should disclose your steady work history to the lender. In the same way, mortgage lenders also check your credit history to determine if you would be able to pay back or not. In case your credit history is not good, your mortgage consultant may help you with it.
3) Choose a well established realtor – Look for a well established realtor in the area where you are looking to buy a house. A well established realtor will save your time and money. You will not have to roam around the whole area and make frequent trips. An established realtor will be able to quickly suggest some good options. Moreover, get some information about the whole area. You can get some information about the traffic, transportation, shopping areas. What may be important to others may not be as important to you and vice versa. So keep a clear mind when you contact a realtor.
4) Check the details of your loan program – Make sure that you check all the details of your loan program. A first time buyer mortgage may have a fixed rate which stays the same for the lifetime of the loan. It may also have an adjustable rate which fluctuates with the national interest rates. There will also be a term of 15 or 30 years. Down payment requirements may depend on your loan program. Some feature of these loan programs include easier qualifying guidelines, reduced closing cost options etc.
It’s always better and safer for first time homebuyers to have an expert of professional by their side to advice them along the way and to lead them to the right direction and to the best of their interests.
Shopping for a new home is an emotional experience, treat it as essentially a business transaction that must properly managed and documented. Nice tips you have here.