Finally having a home to call your very own, and to decorate and enjoy however you please, is an absolutely wonderful time in many young people’s lives; however making the switch from renting to owning can be a challenging process for first time home buyers.
1.) Find a Great Lender
Finding the right lender is so important. Asking your friends and family for referrals is a great way to begin the process of finding the perfect lender for your situation. Your realtor is also a valuable source for information about local lenders. Realtors have the opportunity to work with many different local lenders on a regular basis. They often have first-rate knowledge of who is the most outstanding in the business.
2.) Shape up Your Credit Score
Your credit score will be the deciding factor on whether or not you will meet the criteria required to obtain a mortgage. It will also play a part in the interest rate that the bank will grant you. Check your credit reports from all three credit reporting agencies to ensure that they are accurate. It can be beneficial to your credit score to pay down your credit cards and improve your overall debt to income ratio.
3.) Get Pre-Approved Right Away
Getting pre-approved is one of the most important parts of the home buying process and the very first step first time home buyers should make. Being pre-approved will save you a lot of time in the home buying process. It will also let sellers know that you are serious about purchasing when it comes time to write an offer on a home.
4.) Don’t Make any Large Purchases
When preparing to purchase a home, it is very important that you keep your credit profile the way that it is the day you got pre-approved. Large purchases like vehicle loans, can be great credit builders, but they can also temporarily ding your credit and adjust your debt to income ratio. This can make it difficult to process your loan. Your lender will want to see that there were no major changes to your credit report from the time you got preapproved, until the day that you close.
5.) Figure Out What You Can Afford
It is crucial that you take the time to sit down with your lender and figure out how much house you can afford. Discuss the monthly payment and length of loan that you are comfortable with. Make sure to ask your lender questions about other factors such as home owners insurance, HOA fees and taxes as well.
Remember if you need help learning about the home buying process, we are here for you. Please feel free to contact us with any questions or concerns that you might have. We are happy to help you from pre-approval to handing you the keys and every step along the way.