Buying your first home is a very exciting event. It’s what the American Dream is all about. However, it is important to be smart about your home purchase, especially when it comes to your mortgage loan. First time home buyers will need to consider a number of factors when applying for a home loan and seeking out their new home or condo. Below are some helpful mortgage tips for first time home buyers.
Tip 1: Get Pre-Approved for Your Mortgage
This is a mistake that many first time home buyers make. You go out and search for a home and you find the perfect property. Unfortunately, your purchase offer ends up getting rejected because the sellers are unsure about your mortgage situation. Getting pre-qualified for a mortgage is not enough these days. You should take the time to get pre-approved. This is a more in-depth process that will give you a better understanding of what you can actually afford and can also enable you to lock in the best possible interest rate on your loan. More importantly, a mortgage pre-approval shows you have a solid financial standing and a lender has thoroughly vetted your financial records. Today’s market is moving fast and almost every listing gets multiple offers in a short period of time. A mortgage pre-approval letter will help your offer stand out from the competition and will show your home loan is already on very solid footing.
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Tip 2: Shop Around
It’s always a good idea to shop around for the best mortgage lender. This is going to be the most important purchase you’ve made in your life so far, so don’t take your mortgage lightly. Talk with multiple lenders. Do your research on their experience and integrity. Read reviews and don’t be afraid to “interview” them for the right to earn your business. Find a lender that you are comfortable working with and who you feel has your best interests in mind. Establishing trust from the beginning will make you feel more comfortable with your mortgage loan experience as a first time home buyer.
Tip 3: Understand Your Mortgage Options
Please check out another helpful article titled, ‘The 9 Best First Time Home Buyer Loan Programs’. As a first time home buyer, you have a number of mortgage options to consider, some of which can save you a great deal of money on the loan with better interest rates, lower down payment requirements, tax benefits and other unique advantages. There are FHA loans, VA loans for veterans, USDA loans and special programs from Fannie Mae and Freddie Mac, just to name a few. Understand your mortgage options and make the best decision for your financial future.
Tip 4: Be Prepared
When getting ready to purchase your first home, you have to be as prepared as possible. As we said, this is the most significant financial transaction of your life—at least up until you are ready to move up into your next home! Take the time to plan and prepare for this major purchase. Get your finances in order, work to improve your credit score, pay off high-interest debts like credit cards, car loans and students loans, set a realistic budget and take all the steps necessary to be mentally and financially prepared for your big move. This is not a time to cut corners or rush into any significant financial decisions, so smart preparation is vital to success.
Tip 5: Timing is Everything
Timing is so important in today’s fast-paced real estate market. First-time home buyers need to act quickly, while at the same time acting carefully. Following the tips above will make a huge difference to help you be more prepared for your first home purchase while also having a mortgage lender on your side who you can trust. Take the time to prepare and do your research. Plan your transaction and time all your moves accordingly. Lock in the best interest rate with a mortgage pre approval. These are the steps to take for a more successful first time home purchase.
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