Purchasing your first home is an exciting and scary time. For the most part, new homebuyers are unfamiliar with the home buying process. Before accepting a mortgage loan, it is important to educate yourself on various loan programs. Furthermore, first time home buyers should be aware of factors that improve and decrease their chances of getting a good loan package.
How Much Can You Afford to Spend?
The biggest mistake that some homebuyers make is purchasing a home they cannot afford. Many assume that since their mortgage application was approved, they can meet the expenses of homeownership. On the contrary, some lenders regularly approve questionable loans.
Obtaining a pricier home may sound appealing; however, the risk of foreclosure is higher. Aside from affording your monthly mortgage payment, you must have the funds for utilities and unexpected expenses that arise.
Get Pre-Qualified for a Mortgage
Getting pre-qualified for a mortgage before beginning your search will speed up the home buying process. A pre-qualification provides an idea of an affordable mortgage amount. Thus, you avoid touring homes and neighborhoods outside your budget. A pre-qualification letter from a lender does not guarantee a loan. The loan amount is contingent on income, employment, and credit verification.
Fix Your Credit before Applying
Although it is very possible to get approved for a first time home loan with poor credit, a good credit rating will open the doors for low rates and better financing options. Improving your credit is a slow process. To begin, strive to pay all creditors on time and avoid skipping payments. A key to increasing credit scores is maintaining a good credit standing. Secondly, reduce your debts. Maintain credit cards at half the maximum limit. If possible, payoff balances monthly.
Find a Good Mortgage Broker
Working with a mortgage broker is the best way to locate excellent first time home buying loans. A mortgage broker has access to several lenders which offer various mortgage products. They are familiar with different lending guidelines of many mortgage lenders. The advantage of working with brokers is that they scan the market and match you with the mortgage product that suits your needs. After receiving the loan application, your broker will review your situation, analyze the credit and submit to the lender which will offer the best financing solution.
Should you or anyone you know needs more information about this topic, please contact me. As reL ESTATE professional, my goal is to provide my clients with mortgage financing solutions appropriate to their situation. I can help them on purchasing a new home, refinancing and renewing their current mortgage and even consolidating their debts as I work closely with mortgage professional to help you with your needs.