Tips Every First-Time Home Buyer Should Consider
1 – How Much Home Can You Afford? As a first-time home buyer, it’s important to have an accurate idea of how much money you can borrow for your new home and most importantly, how much you can afford. Sometimes those two aren’t exactly the same (depending on your financial situation). One of the realities of first-time home buying is the frustrating of finding that perfect home only to discover that it is not in your price range.
2 – Should You Get Pre-Qualified or Pre-Approved? Often a mortgage lender will tell a potential buyer they are “pre-qualified” for a loan. This can confuse first-time home buyers, who think they will qualify for that amount. Not likely. With a pre-qualification, little information about your finances is verified (often none). You might find out later that the amount you were “pre-qualified” for was far different than what you actually will qualify for or even afford. What you need is a “pre-approval” in which more information (your credit and other factors) is checked and you can have a better idea how much you can afford for your first home. With a pre-approval, you’re in a better position to negotiate because the seller knows that your offer is more solid. You’ll avoid wasting time looking at homes outside your price range.
3 – What Is Your Credit Score? First-time home buyers should obtain a copy of their credit report and review it. Your mortgage company will pull your credit, but it helps if you know before you start the process. There are places where you can actually get a free credit report. If you find an error, it’s much easier to fix it before a house has been found, rather than dealing with it when trying to close on the loan. Your mortgage banker can even give you tips to help with any minor blemishes.
4 – What Kind of Mortgages Should You Consider? For first-time home buyers, mortgages can be confusing and a bit overwhelming. Ask your mortgage banker every question you can think of. There are no dumb mortgage questions, especially for first-time home buyers. A good mortgage banker will ask you numerous questions about your specific financial needs so that they can match you with the best mortgage.
As a first-time home buyer, these are a few of the tips to help you on your way to being better prepared for getting a mortgage and buying your first home. Don’t take chances. Do your research and ask lots of questions – even your friends and family which mortgage lender they would recommend.