It’s easy to be intimidated when you’re purchasing your first home. It’s likely going to be the largest purchase of your life up until this point. Incidentally, it’s this reason many people feel slightly overwhelmed when they begin the home buying process for the first time. How much money will you need for a down payment? Are you getting a good deal? What should you be looking for when house hunting? There are many critical things to consider when buying a home. If you’re looking for some guidance, the following 10 tips may help take some stress out of your first mortgage application and house shopping experience.
Know Your Credit Score
It’s recommended to know your credit score before you begin applying for mortgage loans so you can work to improve it if necessary. In addition to paying bills on time, you can improve your score by disputing any inaccuracies and refraining from the acquisition of new credit before you apply. Plus, getting denied hurts your credit score. If it’s low, you might want to wait until it’s higher to start applying.
Get Your Personal Items Ready
The application process will likely require pay stubs, W-2s, bank statements, credit lines, previous landlord information and other financial, employment and housing documentation spanning the last several years. Having these documents ready and organized before you begin contacting lenders and sellers will allow you to place offers more quickly. If you’re scrambling to get everything together you risk losing the chance to place an offer.
Prepare for a Down Payment
It’s often said the average down payment for a new home is 20%, but that’s not always the case. Before you fork over more money than you need to, research what types of loans are available for first-time home buyers, like loans from federal programs. Some can help first-time buyers secure a down payment of less than 10%.
Calculate Your Total Monthly Payment
When considering how much your monthly payment will be, don’t forget to include additional costs like taxes, homeowner’s insurance and homeowner’s association payments. After taking additional factors into consideration – as well as the down payment and closing costs – be realistic and determine how much you can truly afford.
Save Money for After You Move In
In addition to saving for your down payment and closing costs, make efforts to save money before you’re finally moved in. You might need to make an unexpected repair or purchase right after you’ve settled in, like a new appliance or plumbing repair.
Consider Future Needs
When purchasing a home for the first time, your family size might be smaller than it will be years down the road. Don’t forget to consider your plans even 10 years into the future when shopping for your home. It’s always better to grow into a home than to unexpectedly outgrow one.
Remember the Bigger Picture
First-time buyers tend to overly obsess over minor details, like fixtures, flooring, landscaping or appliances. It’s important you keep the bigger picture in mind when you’re house hunting, like whether or not it’s a safe place to raise a family. Aesthetics can always be modified later, but location, home size and price can’t.
Get Pre-Approved
When you know you’re ready to begin seriously shopping, you need to seek pre-approval for a home loan from a lender. This will help real estate agents know you’re serious about buying and help you maintain realistic expectations, as you will now have a cap on how much you can spend.
Get Quotes from Multiple Lenders
Before you take the first loan you can get your hands on, explore your options and see what other lenders might be able to offer you. Different lenders will have different rates, fees and loan amounts, and having more options to choose from will help you make the choice that’s best for you. Just remember, applying for a loan affects your credit, so don’t go overboard.
Home Inspection
If you’ve made an offer and it’s been accepted, you’ll need to hire an inspector to assess the condition of the house. Before you make your choice, do some homework – check references, ask if they’re insured and if they have a specialty, and be sure you’re there during the inspection. Don’t be afraid to ask questions – it’s your house!
Moving into Your New Home
Whether you’re a first-time buyer or a seasoned house hunter, the home buying process can be tiresome. After you’ve found a place to call home, let the moving experts at Continental Van Lines help you move safely and get comfortably settled into your new house. Continental offers everything from full-service packing and unpacking to vehicle transportation and furniture assembly. Request a residential moving quote by calling 206-937-2261 or by contacting Continental online today!
http://www.latimes.com/business/la-fi-mortgage-down-payment-20170629-htmlstory.html