A Guide for First-Time Home Buyers
Buying a house is literally the investment of a lifetime. Most people rank their home purchase as their number one financial decision since it outweighs other purchases in terms of actual cost and affects their lifestyle in a number of different ways. To make sure you are prepared for such a major decision, it is probably wise to carefully consider all of the factors from many different angles. Here is a quick guide for first-time home buyers to run through if they feel a little overwhelmed.
Gather All Relevant Documentation
When starting out, make sure you have all of the important information readily at hand. Take a look at your credit report to make sure there are no major issues before your lender runs a credit check. When preparing to speak with your loan officer, make sure you have your bank statements, pay stubs, and tax returns on hand.
Do the Math
It is important to make sure you are getting the best deal with an interest rate that works for you. Just like with any purchase, do not take the first offer that comes your way, and compare prices of different lenders to find the best deal. If you are not happy with the options available to you, it might be worth holding off for another year to build up your credit score.
Get Pre-Approved and Apply
After you find your ideal lender, it’s time to start the application process and get pre-approved for your mortgage or home loan. Based on your credit, different options will be available to you affecting the amount you can take out and which homes you will be able to consider for purchase. Knowing what you’re pre-approved for will help you when you start shopping for your new home, and help you stay realistic with your expectations.
Work with a Knowledgeable Real Estate Agent
The right real estate agent can be your best friend. They should be able to match the expectations you have for your new home with your pre-approved budget. Different agents may specialize in different kinds of homes or focus on certain neighborhoods. Do some online research or listen to your trusted friends and family when choosing an agent.
Get Your Priorities Straight
While your ultimate dream home might still be a few years off, there’s no reason you can’t get all features that you consider to be essential right now. It’s about knowing what you can’t live without and what you can compromise on. For most people, neighborhood, square footage, and number of bedrooms are often non-negotiable. Decide where you can be flexible. Is the home’s age or lack of granite countertops deal-breakers for you? It might be worth it to you in the long run to stay within your budget and sacrifice some of the luxuries and updates. You can always fix up your home when your budget without changing your monthly payment.
If you have questions about the home buying or mortgage loan process, or feel ready to get pre-approved or apply for a loan, please call (855) 352-3772. A Herring Bank mortgage representative would be more than happy to assist you!