You’ll find yourself drawn to owning your home as a first-time homebuyer. You have the option of creating an investment to sell when you retire and for the benefit of future generations.
First Time Homebuyer Tips
- Think About Your Goals and Needs. Be sure to begin researching communities early in the process so that you can find the appropriate location and address. Take a drive or a stroll around the neighborhood at various times of the day and night. This will give you a better idea of your preferences.
- Study and Work on Your Credit. You’ll need an excellent credit score to be approved for a home loan or qualify for a better interest rate. Before you apply, review your credit reports. Then, improve these scores so you can get approved more quickly.Pull free credit reports from each of the three major credit bureaus to get a complete picture of your financial situation (Equifax, Experian, and TransUnion). If you find any mistakes or past-due bills, contact the collection agency. If you’re trying to get a mortgage, you can run into trouble because of these obligations. Get in touch with your creditor to see if there’s anything they can do about it.
- Get Preapproved Before You Apply. Obtain a pre-approval for a mortgage after you’ve found a lender. Preapproval, instead of prequalification, is an official letter from a lender saying precisely how much they will loan you. In contrast, prequalification is a prediction of the prospective loan amount. A preapproval will place you in a much better position when making an offer on a property. Accepting your offer will also make the loan application process much more manageable.
- Put Resources and Assets in Place. You should be able to prove to lenders that you have a steady source of income, regardless of your salary level. Lenders will investigate two years of work history and a regular monthly income and want to check whether you’re getting a salary, hourly pay, or if you’re self-employed. In addition to analyzing your credit report, mortgage lenders often look at your bank statements from the past two months when evaluating your application.
- Find a Way to Get Assistance with the Down Payment. Down payment and closing fees may be covered by various programs, including at the municipal, regional and national levels. As a rule, these loans are only available to borrowers with a specific income (depending on region), and they may also impose a price restriction on the house they buy.
- Set Contingencies in Writing. Any conditions that might enable you to walk away from a contract should be stated clearly when you identify a rival and are ready to make an offer. A home inspection may uncover expensive problems, or your mortgage application may not be approved.If the deal doesn’t go according to plan, you’ll have an exit strategy and receive your earnest investment back.
- Partner with a Real Estate Agent. First-time homebuyers should employ a real estate agent after securing financing and receiving a preapproval letter. Real estate agents specializing in the region you want to purchase may provide valuable insight into the current market circumstances and whether or not the properties you’re considering making bids on are priced appropriately.If you’re buying a house and aren’t familiar with the area, your agent may point out possible problems and advocate for you in negotiating price and conditions.
Your Team at Mortgage City
Applying for a house loan can be a complex process. However, having a partner who can help you navigate the details can make buying your first house much more manageable.Getting your finances in order is essential before applying for a home loan. Working with a professional lender during the prequalification and loan application stage can make all the difference. Mortgage City can help you get the best house loan for your needs if you’re a first-time home buyer in Michigan. We are a certified licensed mortgage originator that serves the states of Michigan, Florida, New Hampshire, Ohio, Massachusetts, Texas, California, Indiana, and Colorado. Call us now at (248) 930-8709 to set up an appointment for your evaluation.
