You’re ready for your new home but still can’t make the decision given the many options available in the market. It is understandable to be undecided given the fact the homeownership is a big investment. As a first time homeowner, it can be a daunting task but that doesn’t always have to be the case. You can check out built by Reward Homes if you’re looking for something new and refreshing. In this post, we are going to highlight some of the tips that could come in handy for a first-time homeowner.
Know Your Budget
There are other costs associated with homeownership other paying for the mortgage. Most people will find out the hard way when they’re faced with expensive repairs and maintenance projects. There are property taxes and homeowners insurance to think about.
Have a List of Home Features That You’d Want
It is a good idea to have a list of all the features you’d want in your home. You can reach to friends and family about the features that should be included in a home. Depending on the size of your family, it will be a good idea to look for a house that can accommodate everyone without problems.
Speak to Different Lenders
It will be disastrous to settle on the first lender you come across. It is recommended that you compare loans from at least three different lenders before making a decision. The rates will be different from one lender to another. Sometimes the closing fee could significantly inflate the amount that you’re supposed to pay. It is a requirement the all lenders should provide a loan estimate to the person who is borrowing in three days. The loan estimate will have a breakdown of all the costs that you will be paying for. There are several loan estimator tools that you can use to gauge how much you qualify for.
Know Your Credit Score
It is important that you know about your credit score before you think about applying for a mortgage. Having a good credit score will make it easier to get approved and you will get good credit terms. Having a bad credit score will make it hard to be approved and will most likely be charged high-interest rates as a result. There is always room for improvement when looking at the credit scores. Make sure you try and clear the majority of your debts before you can think of applying for a mortgage.
You need to look for a preapproval letter before you can start searching for a house. The process of getting preapproved is simple and straightforward. You can reach out to the lender via phone or email. You don’t need to visit their physical office. The loan officer will use your credit report to determine if you meet the minimum credit requirements. You need to prepare all the necessary documents to facilitate the approval process.
It should be noted that a pre-qualification letter is different from a preapproval letter. A pre-qualification is just an acknowledgement that you reached out to the lender. There are situations where you can get a preapproval letter in an hour if you have a healthy credit history.
Hire a Real Estate Agent
There are some first time home buyers who will want to skip hiring a real estate agent because of the fees involved. You should hire a realtor whose interest is getting you the best deal. A realtor will charge a commission when you buy the house. The cost should not be coming out of pocket.
Don’t Get New Credit
It will be tempting to apply for new credit especially if you’re in a financial fix. The credit score is the most important component when it comes to getting a mortgage. It is your responsibility to ensure that you’re not doing anything to drop the credit rating while you wait for the mortgage loan to be approved.
Make sure you’re avoiding new lines of credit when searching for your first home. Your credit score could drop significantly and it might take a couple of months to bring it back to where it was initially. You should also not be racking up debt as that will also not help your credit score.
To sum it up, you need to do proper research if you’re a first-time homebuyer. A single mistake could be costly as you will be financially involved in the purchase for the coming years.