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    Top 5 Must-Do’s for First-Time Homebuyers

    Buying a home is likely to be one of the most exciting (and stressful) times of your life. In order to help minimize your stress, arm yourself with knowledge about the home buying process. The wealth of information available can be overwhelming, so we’ve pulled together our top 5 tips and must-do items for prospective first-time homebuyers!

    1. Determine your budget. There are many online calculators available that can help you to get an idea of what your monthly mortgage payments should be, based on how much money you are looking to borrow. Don’t forget to include property taxes though – property taxes in many areas can significantly change what your actual monthly total mortgage amount will be. Also look at what your income, debts and assets are. Your lender can help you work up a budget, but it’s also great to come in with a lot of information about your income, debts and assets as well as information about any savings requirements or goals you might have.
    2. Examine your credit and your 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 less than perfect, look for ways to increase your score. If you have limited credit history, look for ways to build positive credit before you apply for a mortgage loan. No matter what your score is, review your credit report to ensure that there are no errors on your report which may impact your ability to qualify for the mortgage you want.
    3. Where will your down payment come from? And how much will you need?Buying a home is a big financial commitment, which can often require a big cash down payment. Where will you be getting your down payment from – savings, a 401(k) or IRA withdrawal or as a gift from your parents? Although FHA loans are often an attractive option for first-time homebuyers because they only require you put 3.5% down, you’ll still need to roughly determine how much 3.5% will be and where you’ll be getting those funds from.
    4. Begin to gather up all the documents you’ll need to qualify for a mortgage.When you apply for a mortgage you’re likely going to need to show you lender proof of your identity (passport, driver’s license or similar) as well as recent pay stubs from your employer and copies of your past year (or 2 years) of tax returns. Each lender will have their own requirements, but gathering together these basic pieces of information can help make the mortgage application process go smoothly.
    5. 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 show them you are serious is by submitting an offer that comes with mortgage pre-qualification. In some hot housing markets, sellers won’t even accept offers without a pre-qualification.

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