First Time Home Buyer Loans - Home Buying Advice For First Timers
Written by: Carrie Reeder
Purchasing your first home is an exciting and scary time. For
the most part, new homebuyers are unfamiliar with the home
buying process. Before accepting a mortgage loan, it is
important to educate yourself on various loan programs.
Furthermore, first time home buyers should be aware of factors
that improve and decrease their chances of getting a good loan
How Much Can You Afford to Spend?
The biggest mistake that some homebuyers make is purchasing a
home they cannot afford. Many assume that since their mortgage
application was approved, they can meet the expenses of
homeownership. On the contrary, some lenders regularly approve
Obtaining a pricier home may sound appealing; however, the risk
of foreclosure is higher. Aside from affording your monthly
mortgage payment, you must have the funds for utilities and
unexpected expenses that arise.
Get Pre-Qualified for a Home Loan
Getting pre-qualified for a mortgage before beginning your
search will speed up the home buying process. A
pre-qualification provides an idea of an affordable mortgage
amount. Thus, you avoid touring homes and neighborhoods outside
your budget. A pre-qualification letter from a lender does not
guarantee a loan. The loan amount is contingent on income,
employment, and credit verification.
Fix Your Credit before Applying
Although it is very possible to get approved for a first time
home loan with poor credit, a good credit rating will open the
doors for low rates and better financing options. Improving your
credit is a slow process. To begin, strive to pay all creditors
on time and avoid skipping payments. A key to increasing credit
scores is maintaining a good credit standing. Secondly, reduce
your debts. Maintain credit cards at half the maximum limit. If
possible, payoff balances monthly.
Select a Good First Time Homebuyer Loan Package
Working with a mortgage broker is the best way to locate
excellent first time home buying loans. Many first time
homebuyers do not have extra cash for closing or down payments.
A mortgage broker has access to several lenders that are willing
to offer assistance for down payments and closing fees.
Furthermore, if you have bad credit, a broker can match you with
a bad credit or sub prime mortgage lender. The advantage of
working with brokers is that you receive multiple offers. After
receiving the loan application, your broker will send you up to
four offers from prospective lenders
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