Title: Tips for First-Time Homebuyers
Being a first time homeowner can be very daunting, especially once you have found your dream home. First it is all fun and games with house hunting and then comes the reality…can you really afford your dream home? Is your credit good enough? etc. To help eliminate any potential stress, as it pertains to mortgages, we will share some tips with you.
To start off, we recommend that you do not start house hunting until you actually know what your price range is. You need to be realistic about how much you can comfortably spend. There are many home affordability calculator resources available to help you determine how much you can afford to spend.
Once you make the big decision to purchase a home, it is recommended that you halt any new activities that may affect your credit until your home loan closes completely. (This includes opening new credit cards or automobile loans.) Your credit score will help to determine not if you are approved for a mortgage loan, but also what your interest rate will be and potentially even the terms. It is also recommended that you actually check your credit in the beginning of the process. It is important to do this in the event there may be any errors that have brought your credit score down. Or you may have the possibility to improve your credit by paying any debts that are outstanding.
It is also recommended that you compare mortgage rates from a minimum of three lenders. Comparing rates can potentially save you money in the first five years of your loan. Be sure to also get quotes on fees. Also ask the lenders if you are able to purchase discount points. Purchasing discount points means you would prepay interest up front to secure a lower interest rate. Depending on long you plan to stay in your new home and if you have the funds readily available to purchase the points are things to keep in mind if it makes sense to purchase the discount points or not.
Having a preapproval letter can also make buying a home less stressful as well. Based on your incomes and debts, you can get pre-qualified for a mortgage. Getting pre-qualified for a mortgage means you get an estimate of how much a lender would potentially be willing to lend you. Having a preapproval letter will give you an upper hand when compared to other potentially buyers who have not made these step. Home sellers will know how serious you are about purchasing their home.
Our ultimate goal is to ensure you have a very positive experience when purchasing a home! These tips will help ensure your experience is as peaceful as possible.