Buying Your First Home? Here's Where To Start.
Buying a home is likely to be one of the most exciting (and stressful) times of your life. To help minimize your stress, arm yourself with knowledge about the home buying process. These are our top 5 tips and must-do items for prospective first-time homebuyers!
Determine your budget. Use our online mortgage calculator to help you get an idea of your monthly mortgage payments based on how much money you are looking to borrow. For a more accurate assessment, you'll want to pre-qualify with us (you can complete it online, and it won't affect your credit score). But using our online calculators will give you great insight.
Examine your credit and credit score. You want to get yourself in the best position to qualify for the lowest interest rates and best mortgage terms, and one way to do that is to beef up your credit score. If your score is on the low end of the spectrum, look for ways to increase it. If you have a limited credit history, look for ways to build positive credit before applying for the loan. No matter your score, review your credit report to ensure that there are no errors as they may impact your ability to qualify for the loan program you want.
How much do you have for a down payment, and where will it come from? Although FHA loans are often an attractive option for first-time homebuyers because they only require you to put 3.5% down, you'll still need to determine how much that will be. You'll also need to figure out where those funds will come from. Your savings or a 401(k) withdrawal? Is it a gift from your parents? Decide this sooner rather than later.
Start gathering the documents needed to qualify for a mortgage. When you apply for a mortgage, you'll need basics such as legal ID, recent pay stubs, proof of any other sources of income, and copies of tax returns from the past two years. You'll need to supply documentation for other items specific to the lender and the loan program, but gathering the basics can help speed up the process.
Get preapproved for a mortgage before you begin house hunting! Home sellers want to know that you're serious about buying, and one of the best ways to convey that is by submitting an offer that's pre-qualified.