Home Loan Tips for First Time Homebuyers

1. Home Loan Tips for First Time Homebuyers If you are new in the market for buying your home, the process of getting your first loan may be daunting. More you know about the mortgages, more you can prepare yourself for the application process. Here are some smart tips that will ease your process and possibly save you thousands of dollars. Check Your Credit Score How much costly home you can afford and how much closing cost you would have to pay directly depends upon your credit score. The first thing every homebuyer should do is to check their credit scores and report. Estimate Your Budget Setting your budget is the key factor in buying a home for the first time. Look at your household expenses and fixed monthly expenses to determine how much house you can afford. Don’t max out your budget just to qualify for the certain mortgage amount.

2. Get Your Assets in Order When you visit a lender’s office to apply for a mortgage, you would be asked for certain documents like your bank statement, employment status, tax returns, driver’s license, brokerage statement, social security card, and more. It is vital to start locating and gathering the necessary documentation before visiting a lender’s office. Shop Multiple Lenders Once you have defined your budget and arranged your documents, it’s time to shop for a mortgage. Compare mortgage rates before you lock in and don’t just check the big national mortgage lenders. Shop around for local lenders as well. Get Pre-Approval before Shopping for Home Getting pre-approval on a mortgage can be an extremely valuable shopping tool. Submitting a pre-approval along with your offer helps the seller to identify that you are a serious buyer. Though it is important to differentiate between pre-approval and pre- qualification. Budget for Closing Cost and Mortgage Insurance Make seller-paid closing cost work in your offer to reduce your out-of-pocket expense. This can be a smart move by first time homebuyers with low savings to improve their ability to get the loan. If the down payment on your mortgage is less than 20%, you would have to pay private mortgage insurance. So it’s better to budget your mortgage. Put Exigencies in Writing Keep any contingencies in writing in your purchase agreement to avoid any hassles. These may include your loan approval falling through or the home inspection revealing the costly affair. Before closing, get estimates from the contractor on any home upgrades. In addition, it is critical to know about loans for first time homebuyers as it will help you make the right decision. Source: http://www.apsense.com/article/home-loan-tips-for-first-time-homebuyers.html