Buying a first home can be one of the most stressful experiences of your life. However, there are actions that you can take to minimize the stress and maximize your chances of getting approved for a loan you’ll love for years to come.
1. Check Your Credit
The first step that you’ll want to take is to check your credit. Typically, lenders want to see a credit score of at least 620 and a history of timely payments. You can improve your score by disputing inaccurate information or by taking care of late or missed payments.
2. Consider Your Loan Options
First-time buyers may benefit most from an FHA loan or others that offer flexible down payment and other terms. Your loan officer can talk more about which mortgage options meet your needs and budget.
3. Set a Budget
A bank will approve you for the maximum that you qualify to borrow. However, this may be more than you can actually afford to spend. Setting a budget helps to narrow your search only to homes that you can afford.
4. Consider All Expenses
The principal portion of your mortgage payment is just one cost to consider when shopping for a house. You’ll also need to account for mortgage interest, home insurance, and property tax bills. Home maintenance and other costs should also be accounted for when creating your budget.
5. Understand Wants Compared to Needs
While you may want something with four bedrooms and a pool, you might not be able to afford that. Instead, you might have to settle for a home with three bedrooms located close to a public pool. Of course, as your finances get stronger, you can add a pool or another bedroom if you still want it.
6. Don’t Let Your Emotions Control Your Thinking
In today’s market, it’s not uncommon for homes to receive multiple offers. While you might be tempted to get into a bidding war to get the home you want, it’s alright to just walk away from a home that becomes more expensive than it’s worth.
7. Trust Your Real Estate Agent
Your real estate agent is tasked with making sure that your needs are met throughout the house-hunting process. If you have any questions, don’t hesitate to ask, and you should also not hesitate to lean on this person when dealing with sellers.
8. Get Pre-Approval
A pre-approval letter means that you’ll likely get approved for a mortgage if your offer to buy a home is accepted. In addition to proving that you’re a serious buyer, it also helps to determine your budget because you’ll know how much you’ll likely be approved for. You can get this letter before shopping for homes and before applying for a mortgage.
If you are in the market for a house, it’s important to keep your emotions in check. Understanding your budget and your needs can make it easier to target houses that you can afford and get a loan that you can afford now and for many years to come.
Published by: Nelly Chavez
