Mortgage 101: 5 Tips For First-Time Home Buyers

With the spring home buying season in full swing, we thought it would be a great time to offer some tips for first-time home buyers. Buying a home can be exciting and intimidating at the same time, especially for first-time home buyers. Here are five tips to help make the process go more smoothly.

 

Determine what you can afford

One of the first things you should do is figure out how much you can afford to spend on a home. Meet with a lender and go over your finances to get an estimate of how much the lender thinks you could be eligible to borrow. This will help you determine a realistic price range when you start looking for a home. Knowing how much you can afford before you start shopping for a home will make the entire process a lot smoother.

 

Check your credit

Your credit score has a big impact when it comes to qualifying for a mortgage. Before you start looking for a home, it’s a good idea to check your credit and get a sense of where it stands.  Checking your credit report before you start the mortgage process will give you an idea of what lenders will see, and will also give you an opportunity to correct any mistakes and make improvements to your score. Take a look at our post on tips to improve your credit score before you apply for a mortgage loan, for more information about credit and how it can impact your mortgage.

 

Organize your documents

There is a lot of paperwork involved in buying your first home. Knowing what documents you need and where to find them can save you a lot of time when you are ready to buy a home. Take a look at our mortgage checklist to see what documents you will need so you can start collecting and organizing them.

 

Figure out your down payment options

Coming up with a down payment can be the one of the biggest obstacles for first-time homebuyers. Even if you have a steady income and decent credit score, it can be challenging to save for a down payment. While saving for a down payment can seem like a daunting task, with the right planning and budgeting you can reach your savings goals faster than you think. It’s also a good idea to talk to your lender to see if you qualify for down-payment assistance. Knowing what your options are and how much you will need to save before you start the process, will help prevent any snags or surprises along the way.

 

Get Pre-Approved

To be pre-approved for a mortgage means that a lender has looked at your credit and financial history and determined that you would be eligible for a mortgage. Getting pre-approved for a specific loan amount can make your offer more attractive to sellers because he or she will know you are only a few steps away from obtaining an actual mortgage. Pre-approval can also help speed up the underwriting and loan process, which will save you time once you have found your dream home and are ready to buy.

Are your ready to take the next step in financing your future home? Talk to an expert by filling out the form below.