By DD HalpernJun 8, 2021
Buying your first home is exciting, but it can also be stressful if you’re unfamiliar with the process. Here are some tips to help first-time homebuyers prepare for and breeze through the homebuying experience.
1) Save for a Down Payment
Saving for a down payment on a home is essential for homebuyers who will be applying for a mortgage. Many mortgage loans require a down payment, and having the money saved will give you more purchasing power. Making a down payment will also reduce the total amount you owe on the mortgage. Putting more money down means you’ll be paying interest on a smaller mortgage loan amount, which will make your monthly payments lower, and save you money over the course of the loan. It’s never too soon to start saving for a down payment.
2) Check Your Credit Reports
Credit is a central part of any loan application process. All lenders, including credit unions and banks, will use an applicant’s credit payment history and credit score to determine that individual’s ability to repay the mortgage loan. The three major credit bureaus (Experian™, Equifax®, and Transunion™) gather information about your credit payment history and use this information to generate your unique credit score. Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting company every 12 months. Lenders will use your credit information to determine your mortgage loan interest rate. Generally, the higher your credit score, the lower (better) the interest rate you will be offered.
3) Get Pre-Approved to Determine How Much You Can Afford
Getting pre-approved will help you prepare to shop for a home. A pre-approval is a preliminary determination on whether you will likely qualify for a mortgage loan under a lender’s guidelines and the amount of the loan you would qualify for. To get you pre-approved your loan originator will ask you to provide documentation regarding your income, debt and assets. Home sellers will take your offer more seriously if you have a pre-approval letter, as they know you are working with a lender and will likely qualify for a mortgage.
4) Work with a Real Estate Agent to Find Your Home
While many homes are available for sale by owner, working with a professional real estate agent or a licensed Realtor® can save you time and energy, and simplify the homebuying process. It is important to work with a real estate professional with whom you feel completely comfortable. Ask friends and neighbors for referrals. Your agent will help you focus on seeing homes that are most likely to meet your search criteria. And, when you find a home you’d like to buy, your agent will make the offer and negotiate the price on your behalf.
5) Apply for a Mortgage
When a home seller accepts your offer, it’s time to contact your loan originator to move forward with your financing. They will discuss the loan options that work best for you. Your financial details plus the home price and other information will be submitted for processing and underwriting. The loan process can take some time, so be patient and trust that your experienced loan originator is doing everything possible to make the process go as smoothly as possible to get you to the closing table!
We’re here to help you get the answers you need about buying your home.
If you have any questions about the home buying process, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!
NFM Lending is not a Credit Repair Company. You should consult with a Credit Repair Company to determine what may be best for your individual needs. The pre-approval may be issued before or after a home is found. A pre-approval is an initial verification that you have the income and assets to afford a home up to a certain amount. This means we have pulled credit, collected documents from you, verified assets, submitted your file to processing and underwriting, ordered verification of rent and employment, completed an analysis of credit, debt ratio and assets, and issued the pre-approval.
These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.